Console Options Without Disc Drives Could be GameStop’s Final Death Knell
upstart writes in with an IRC submission:
Console options without disc drives could be GameStop's final death knell:
The latest quarterly earnings report from GameStop doesn't show much sign of a turnaround for the long-troubled game retailer. Sales were down 26.7 percent year over year for the April through June quarter. Even accounting for permanent store closures and COVID-related reduced operating hours, so-called comparable "same-store" sales were still down 12.7 percent year over year. GameStop's already depressed stock is down nearly 8 percent on the news, as of this writing.
GameStop still publicly sees an "opportunity to capitalize" on the upcoming release of new Sony and Microsoft consoles, which could help turn its business around in the short term. But there's some reason to believe the coming generation of consoles could actually make GameStop's long-term prospects worse, thanks to console options that get rid of disc drives entirely.
[...] In an earnings call, GameStop CEO George Sherman acknowledged that "there has been growth in digitally downloaded games" and said GameStop is "not debating the growth of digital gaming." But he also tried to put a positive spin on the fate of GameStop's physical game sales going into the next generation of consoles.
"First, new consoles have a disc drive," Sherman said. "So for the next seven years, the consoles will play both the physical and digital software that we sell."
That's only partially true, though. Both the Xbox Series S and the PlayStation 5 Digital Edition actually won't have a disc drive. And while GameStop does sell some digital software, the bulk of its business comes from the sale of new physical games and high-margin pre-owned games.
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