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Tradeins to sustain retailers

Published on November 17th, 2010

analyst Micheal Pachter has once again stuck his neck out declaring that used game retailers, such as GameStop, will continue to turn a profit over the coming decades, due to their customers unwillingness to buy games digitally.

"While we don’t expect investors to abandon the view that a migration of software sales to digital downloads is inevitable, we think that GameStop is likely to continue to gain market share over the next several years, as its core customer values the option of trading in physical goods for store credit," he explained in an investor note, seen by industry website MCV.

"We think that this customer will be among the last to embrace digital downloads, and think that the Company has anywhere from 10 to 20 years of healthy earnings and cash flow generation ahead of it."

Whether Pachter’s comments come to fruition remains to be seen, as EA and THQ have already implemented aggressive DLC policies in order to dissuade customers of buying games used, and it is believed other publishers have plans to follow suit.

Nevertheless until these practices are adopted wholesale it appears the likes of Game, HMV, Gamestation and of course GameStop are safe for the foreseeable future, however the number of customers interested in a physical product is sure to diminish drastically as digital prices fall due to smaller manufacturing costs.

Whatever the case, the debate regarding used game sales and the impact on the games industry is sure to run and run.

Tags: Industry,

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  • Tradeins to sustain retailers
Tradeins to sustain retailers

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