Author Topic: GME - Game Stop Corp  (Read 17879 times)

Foreign Tuffett

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Re: GME - Game Stop Corp
« Reply #70 on: July 18, 2019, 09:20:52 AM »
Because ATVI / EA make more money from digital downloads and have zero incentive to boost sales to GameStop where they make lower margin on products and are already unhappy with their arrangement.

While I agree with what you're saying, I think you are missing part of my point: It's about advertising, increased product awareness, and boosting sales in every channel. Product awareness and sales conversion are weaknesses of consumer-facing, fully digital business models. Having a meaningful physical presence can help.

Also, GaaS business models mean that publishers want to sell (or, in the case of F2P business models, have gamers download for free) an increasingly strong incentive to move as many copies of their games as possible. Why? Because, all else equal, more unit sales = more overall spending on DLC packs, loot boxes, and other digital horses***.

Would what I'm suggesting actually work? Probably not, but it's likely still a better plan than betting on e-sports.


5xEBITDA

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Re: GME - Game Stop Corp
« Reply #71 on: July 18, 2019, 09:54:47 AM »
Because ATVI / EA make more money from digital downloads and have zero incentive to boost sales to GameStop where they make lower margin on products and are already unhappy with their arrangement.

While I agree with what you're saying, I think you are missing part of my point: It's about advertising, increased product awareness, and boosting sales in every channel. Product awareness and sales conversion are weaknesses of consumer-facing, fully digital business models. Having a meaningful physical presence can help.

Also, GaaS business models mean that publishers want to sell (or, in the case of F2P business models, have gamers download for free) an increasingly strong incentive to move as many copies of their games as possible. Why? Because, all else equal, more unit sales = more overall spending on DLC packs, loot boxes, and other digital horses***.

Would what I'm suggesting actually work? Probably not, but it's likely still a better plan than betting on e-sports.

I agree that F2P = more volume needed, but I also don't think that the ATVIs of the world are going to be very quick to slash pricing on, say, COD to the extent they need more advertising to drive volume. If anything, the publishers have shown themselves to be very slow to adapt to this thing and I don't see them suddenly altering course and ripping off the band-aid on pricing so quickly.