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'Amazon is of little threat to GameStop's core business' says EEDAR
Citing an Electronic Entertainment Design and Research (EEDAR) report released in the past week, GamesIndustry.biz is reporting today that, while the announcement of Amazon.com entering the used game trade triggered a 13% drop in GameStop stock, "Amazon is of little threat to GameStop's core business." According to EEDAR, this doesn't mean Amazon is doomed to fail, but that "Amazon and GameStop can co-exist peacefully," which sounds awfully nice to us on the consumer side of things.How did they arrive at these rather broad conclusions, you ask? "EEDAR conducted a survey and recorded the trade-in value, used price, and new price of 79 game SKUs (57 that applied to the survey) at Amazon and GameStop." After doing so, they arrived at this, possibly shocking, revelation: "On average, GameStop offers a better value on trade-ins by over 3%." Seriously?To round out the EEDAR report, we'll leave you with this one, astonishing truth: "Amazon's entry into the used gaming market will expand the used market into new territories and make available to new consumers rather than steal share away from GameStop's core business." So, what's the lesson here? Competition: good for consumers, (apparently) okay for retailers.
GameStop stock gets buy nod
GameStop, the world's largest video game retailer, is riding a wave of good fortunes. In the wake of the PS3 launch, analysts believe gaming is going to do well which means (ta-da) GameStop stands to profit. We imagine they'll look even better come tomorrow (Wii launch day for those living under a rock/glued to their PS3). Michael Pachter, an analyst with Wedbush Morgan Securities has some high praises for GameStop; Pachter handed the video game retailer a strong buy recommendation. He calls GameStop the "destination for new stuff." Regardless of what you may think of GameStop, when a specialty store does well, we know the suppliers are looking good, too. GameStop getting a rosy thumbs-up means good things for gamers; our hobby is going to be around for a while. Anyone planning on investing in GameStop (then boosting their shares via the mass-consumption of games)?
