Yesterday, GameStop (NYSE:GME) announced it will allow customers to convert free gamestop gift card. A consumer will just have to fill out their gift card info as soon as verified, an e-mail receipt is going to be delivered to them. GameStop is finally understanding that its 4,400 store locations face a severe threat.
Inside a previous article on GameStop, I discussed just how the changing industry landscape was a menace to GameStop’s business design. The business shift to digital downloads as well as an influx of purchases from the web will cut GameStop out from the equation. By last quarter, digital sales represented a miniscule 5.7% of gross profit. By using these a reliance on conventional, GME is placed to for any tough future ahead.
With GME trading its highest level since January, investors should sell their shares and think about the negative long term outlook. The shift to digital and on-line gaming sales is apparent. GME lacks a benefit in this domain and will suffer. Management is wanting to spur online sales, though with no way to offer you benefits of sites including Amazon (NASDAQ:AMZN), it will eventually falter. High costs in their retail locations coupled with the threat of declining sales will show to be vexing.
Disclosure: The writer has no positions in virtually any stocks mentioned, without any plans to initiate any positions in the next 72 hours. The author wrote this post themselves, plus it expresses their own personal opinions. The author is not really receiving compensation because of it (besides from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this post.