Console options without disc drives could be GameStop’s final death knell

Enlarge / Seems like an extreme reaction to buying a console without a disc drive, but OK...

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.

Putting on a brave face

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.

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