A quick recap: Video game retailer GameStop shares sank immediately following the news of Playstation Now, a cloud-based project that brings PlayStation, PS2, and PS3 games to the PS4 console and handheld PS Vita, as well as other Internet-connected devices like HDTVs, tablets, and smartphones. This could potentially cause problems for retail stores like Gamestop as consumers look toward a future sans physical disks.
Meanwhile, analysts at Stifel Nicholas downgraded GameStop stock to “hold.” At Tuesday’s close, the shares had fallen 8.37%.
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Pachter comments:
In a note to investors, Wedbush Morgan analyst Michael Pachter dismissed fears streaming games services will affect retail in the short term. “Sony’s sell-through number helps GameStop much more than the launch of PS Now hurts them, yet GameStop shares getting hammered,” he said. “The sell-off in GameStop shares that followed the PS Now announcement is overdone.”
Pachter pointed out that investors have known about Sony’s streaming plans since it acquired Gaikai in 2012, and that there’s no evidence PlayStation Now will be successful, as services like OnLive had failed to revolutionise the world as promised.
“It is important to note that PS4 has no backwards compatibility with PS3 discs, meaning that the availability of PS3 digitally streamed games will not directly result in lower used sales of PS3 games to PS4 owners,” he argued.
“GameStop’s used gaming sales from PS3 discs on PS3 consoles are most likely to be impacted; however, until we know more about game availability, timing, and pricing, among other factors, we do not see a meaningfully negative impact to GameStop in the near-term.”
Source: http://www.vg247.com/2014/01/07/playstation-now-announce-punctuated-by-gamestop-stock-dip/
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Gamestop comments:
"GameStop has built a $600MM digital business, with most of the digital games sold through our stores. Similar to how we worked closely with our partner Sony to successfully sell the PlayStation Plus service, we are looking forward to working with them on including the new PlayStation Now service as part of our portfolio of gaming products we offer our customers," a representative for the company said.
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Random guy on the internet comments:
The end of gaming is here. I can not wait to shell out 60 bucks for a game and then shell out how ever much more just to "subscribe" to some BS network that will make owning a game completely worthless unless you keep paying. On top of all this Sony has already proved it's own inability to keep hackers from stealing every little bit of information we are going to be forced to put into the Cloud. Three weeks of no PS Network will seem like a walk in the park compared the the total cluster f*** it will be when something goes wrong and no body anywhere in the world will be able to play their games, even if they just want to play the increasingly lame duck single player campaigns that just feel badly stitched on like an after thought.
http://money.cnn.com/2014/01/08/technology/sony-playstation-now-streaming/
