GameStop Takes a Hit This Week as Xbox One Unveiled

Heidi Speare May 27, 2013 0

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The revealing of the new gaming platform from Microsoft called Xbox One has happened few days ago. The reviews and comments, which are not so good, can’t stop surrounding this device. But, this is not the major problem here. The retailers that are selling these gaming platforms are not doing so great either. I don’t know if this means that people are losing the desire for the games or is something else is the problem.

All the gamers around the world don’t seem that get the idea of how all the old and used games will work on this new Xbox One. And Microsoft has said something about this but its representative didn’t give details about that. He only said that they are looking at the possibilities for enabling the gamers to use the already used games but they are not quite there yet and maybe in near future they will have the solution. This doesn’t give very much of a hope but we are trying to stay positive.

GameStop felt the biggest hit here because from the profits of this fiscal 1Q we can notice that there is certain revenue drop. To be precise, 6.8% was the percentage of the revenue drop. And this is not all. The GameStop shares have dropped 11% to $32.10 and this is not something that will make the investors put on their happy faces.

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As it looks like, the selling of used games and the new gaming platforms through it will take all the blame. The thing that we know for now is that all the users have to install a game from somewhere, from a disk for example, and right after the game is installed you can play it whenever you like. This looks very simple right? Well, the sharing of the game is the problem. If you want to use this game on a different console you will need to pay small fee for doing this thing. With this, GameStop will have difficulties to maintain its business because selling used games the retailers will make less money from it.

Added to this, Microsoft has said that it will take a cut from every sold used game for the Xbox One when this feature will start. Plus, the game publishers will want to take their parts of the selling and you can calculate what will remain for the retailers. Yes, I agree that the retailer stores can offer the game by any price they want but many reports have calculated that the cut for the retailers can’t be over 10%.

This is really confusing but there are so many unclear things that we can’t even predict when this information will came on top.  Even though GameStop didn’t make any comments on this, we are not so sure if this is the main reason for the drop. But as the things are set, there isn’t another explanation for it.

The CFO Robert Lloyd has said that they are trying to stay positive in the company and they expect this market of pre-owned games to grow as the future comes and people get used to this new platforms. He said that people will still be using the old gaming platforms no matter the fact that those new platforms are already on the market. Plus, when they receive the proper updates for using these used games it will cause more game trades out there on the market.

These new consoles have caused so many problems out there on the market that the people are already changing their playing habits. I will not be surprised if they start playing their games on their older platforms or on their PCs. Maybe this is not a nice thing to hear but if there isn’t solution found in near future, the market will continue to struggle. Everything will be easier if Microsoft and the other manufacturers explain us the process of using the old games.

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