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PlayStation Now announce punctuated by GameStop stock dip

Tuesday, 7th January 2014 21:52 GMT By Brenna Hillier

US retail chain GameStop took a hit on its share price following the announcement of Sony’s game streaming service PlayStation Now today.

GamesIndustry reports GameStop stock is trading 9% lower than yesterday in the wake of Sony’s announcement.

Many other non-retail companies related to the announcement, such as third parties which release games for Sony platforms, have enjoyed higher trading prices today. This suggests investors think PlayStation Now has legs, on top of enjoying the good news that the PS4 has sold 4.2 million units, but are worried about how it might affect retail performance.

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.”

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12 Comments

  1. Legendaryboss

    Digital future is slowly but surely happening, its inevitable.

    #1 9 months ago
  2. Erthazus

    Pachter is right.

    “there‚Äôs no evidence PlayStation Now will be successful, as services like OnLive had failed to revolutionise the world as promised”

    Because it’s truth. Onlive still exist to this day and no one cares. Onlive will evolve and still no one cares and no one will care about it.

    Digital future on the other hand is inevitable. Yes.

    #2 9 months ago
  3. Phoenixblight

    @2

    Onlive is dead in the water. Gaikai has legs because there were a lot of big name investors behind it like Dell and EA before the buyout. Onlive is not functional anymore because when they died and was magically bought up again they had to sell a good portion of their server farms and is now barely on life support.

    #3 9 months ago
  4. SlayerGT

    @2 What’s Onlive?

    #4 9 months ago
  5. Erthazus

    @4, http://games.onlive.com/

    the same thing as Playstaton Now except that it works right now.

    #5 9 months ago
  6. Animeboy413

    Stocks drop all the time this has nothing to do with gaming

    #6 9 months ago
  7. KAP

    @5

    I know your trying to put a downer on Playstation Now but, I think it’s awesome. Sorry bro..

    #7 9 months ago
  8. Fin

    @5

    Nice bro. Do they have PS3 games?

    @6

    Nah, Gamestop’s is particularly tied to gaming news that might effect its profits (anything digital).

    #8 9 months ago
  9. SlayerGT

    @5 Erth my point is no one knows wtf it is. Blockbuster said the same thing about Netflix you are about this..

    #9 9 months ago
  10. Erthazus

    @9, Everyone knows what it is. In fact when it was announced it was the biggest news for it’s time.

    @8, Bro, Do PS3 have PC games?
    Shut up Fin, you are annoying.

    #10 9 months ago
  11. SlayerGT

    @10 We’ll see what happens then I guess.

    #11 9 months ago
  12. pukem0n

    gamestop should just drop all Sony games from their inventory ^^

    #12 9 months ago

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