Pachter: So Far, GameStop Not Impacted By Online Pass

August 20, 2010 -

Michael Pachter, gaming research analyst for Wedbush Morgan Securities, says that schemes to recoup cash from used game buyers doesn't seem to be having an impact on sales at GameStop. In a post-financials report on the retailer, Pachter said that the country's largest games retailer remained unscathed in its latest quarter and that aggressive code-based schemes for used games weren't hurting the retailer’s bottom line. This could be because most of these schemes from EA and THQ (in a small measure) are targeting multiplayer, which GameStop says only 25 percent of used game buyers are interested in.

"The company has not seen a negative impact on used software sales from first-use codes or new competitors in the space," Pachter said. "The company estimates that only 25 per cent of used game buyers play online.”

Naturally EA and THQ have just barely rolled out such schemes on a couple of titles. We'll see how it affects used games sales of titles like the latest Madden game in the next quarter. Pachter also shared his pessimism on GameStop’s plan to create a digital market space to sell DLC.

"We remain skeptical about how GameStop will participate in digital distribution," he said. "After a successful trial run in 35 test markets in the spring and summer, the company will complete a full DLC kiosk rollout in Q3."

"While we agree that the DLC opportunity is large and growing, we are skeptical that it will be a sales growth driver. Rather, we think that DLC will at best forestall the inevitable cannibalization of physical disc sales and allow GameStop to capture a small percentage of this cannibalization, with relatively insignificant margin contribution."

Source: MCV UK


Comments

Re: Pachter: So Far, GameStop Not Impacted By Online Pass

Without having seen Gamestop's plan to sell DLC, I'd have to question how they think they can legally do that.

Also, I think we're at least another quarter or two away from really seeing the negative effects of used game sales. Lets see how well Gamestop is feeling in Q3 2011.

-- Dan Rosenthal

-- Dan Rosenthal

Re: Pachter: So Far, GameStop Not Impacted By Online Pass

How do they think they'll get away with this?! I'm sure they'll do something illegal in all 4000+ stores and the international corporation will be sunk by a lawsuit! ...!!! 

Ohwait, no... they're more likely allowed to sell DLC because of a business partnership between themselves and the publishers.  Talking to gamers in person, enough of them don't even know how to get their Xboxes online that it's going to be a very, very long time before publishers can give the finger to retailers like GameStop entirely by doing away with physical media.

This initiative means little more than letting gamers buy an $8 DLC pack rather than spending $20 on points they won't use... and encouraging GameStop's umpteenthousand register monkeys to suggest DLC alongside game purchases.

 
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