Quote:
Originally Posted by Leon
Any other monetary stream would help their business. Is Gamestop still a thing? I don't play video games but my daughter and her husband do. I don't think they go to Gamestop though.
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It’s a dying business model. Their core business is selling new and used video games. The problem is the industry is transitioning away from physical media much like the movie industry did. The vast majority of games now require you to download the entire game from the disk to the system (plus large data online downloads) so there is really no point to drive to GameStop and buy the game when you wake up the morning the game releases and it’s already downloaded on your gaming system. It wouldn’t surprise me if by the end of this decade the gaming companies completely stop selling the physical media and it will almost certainly happen within 10-15 years. They are essentially blockbuster circa 2005.
Despite this, their market cap in 2021 jumped from about $1 billion to $100 billion mainly because a guy on Reddit got upvoted with a bunch of fake internet points and financially illiterate people bought an astronomical amount of idiotic OTM leaps at valuations almost comically high. Like any self respecting capitalist company whose failing business was instantly valued 100x times higher overnight, they issued diluted shares at the new insane valuation and pocketed billions. In the following years the stock will randomly run to absurd levels, the company will issue more direct shares, and when the stock crashes back again it blamed alternatively on Wall Street, Ken Griffin, or Robinhood. Meanwhile the company is now run by the guy that pump and dumped Bed, Bath, and Beyond in bankruptcy and realizing the core business has as much of a future as polio iron lungs, attaches the company to whatever is the “IT” occurrence in the social consciousness (crypto, AI, and now collectibles) when at the end of the day all they really do is sell used video games.
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