The fate of retailer GameStop has been heavily discussed in 2019 following the news that the company would be shuttering up to 200 stores by the year’s end, among a number of other red flags like letting go of a significant portion of its workforce. After the official name and launch date reveal of the PS5, which is aiming for a holiday 2020 release, the GameStop’s stock has lowered by 5%, highlighting some possible discomfort from investors on the news.
As Senior Analyst at Niko Partners Daniel Ahmad noted, this could be due in part to the fact that investors are now expecting a weaker late 2019/early 2020 for GameStop since the new systems (Xbox included) won’t launch until late next year. Considering it was highly unlikely for the new systems to drop in 2019, the 2020 release window shouldn’t come as a huge shock.
Gamestop stock price down 5% on PS5 holiday 2020 launch news.
It seems like some investors might have been expecting an earlier launch date, which would be weird given everything has pointed to holiday next year. pic.twitter.com/G28s27JvvQ
— Daniel Ahmad (@ZhugeEX) October 8, 2019
We know that the PS5 will support physical media, which GameStop is pleased about. But with the increase in digital sales and the rise in popularity of streaming services like PlayStation Now, it’s unclear how the new systems will impact GameStop’s business.
What is clear is that the company has some restructuring to do, which it’s already been experimenting with, turning some stores into social destinations rather than just a place to get games. One test store in Oklahoma had retro systems set up in the back, allowing visitors to play old games, buy snacks, and enjoy a sleeker, simpler store-layout. You might see new designs like these pop up throughout the country if they turn out to be successful.
Time will tell if GameStop will survive the ever-changing business of the video game industry. For now, the company is still afloat, but many signs point to its unfortunate demise in the coming years.
