GameStop stock plunges nearly 40 percent as gamers brace for new era of consoles | Washington Post

Fun while it lasted

"But the gaming retailer also faces longer term challenges. Customers are increasingly opting to download video games over the Web rather than buy games as discs. That shift in consumer behavior is eating into GameStop’s sales of pre-owned games, since a greater share of consumers no longer have physical games to trade in and a smaller share of customers want to buy them. The company said its pre-owned sales declined by more than 20 percent this quarter.

Perhaps even more unsettling for GameStop is the explosion of online and mobile games that exists outside the traditional console world. Played on smartphones, tablets and Web browsers, these games don’t require the purchase of additional hardware. What’s more, an array of audacious gaming initiatives from the likes of Google, Amazon and Apple are vying to do away with consoles and develop a cloud-based gaming model that resembles the streaming powerhouse Netflix. (Amazon founder and chief executive Jeff Bezos owns The Washington Post.)

In its 2018 annual report, GameStop warned shareholders that if the preference for downloading games increases and if technological advancements allow people to access games through other means at home, “customers may no longer choose to purchase video games in our stores.""

GameStop stock plunges nearly 40 percent as gamers brace for new era of consoles | Washington Post