WMT is going to have low prices on video games. Big deal! That's not news and should be no surprise to GME's management or the market. What's next? Will Best Buy start selling video games too?
WMT has been after GME's market for years with little success. (Interesting that WMT wants copy GME business model when others are claiming GME is dead.) WMT's lower prices change nothing...other than showing WMT's desparate attempt to gain share in one of the few growing retail sectors.
There is plenty of room for multiple game retailers. Regardless of where the new games (lower margin) are purchased, GME will benefit from the increase in used games (higher margin) returns & resales.
I couldn't agree with you more. People are surprised that Walmart is having a sale and that on line retailer Amazon has a lower price! Big deal. Go to the mall this evening and see how much of generation X is hanging out at Game Stop. What the trading community doesn't realize is that Game Stop is cool and Walmart is not. This is a non-issue.
I disagree. It's not a non-issue, but of course it's not going to destroy GME either. This is the peak season for video games. The reason is because they are given for Christmas presents. Generation whatever are not the people buying games for Xmas. It's their parents, who are not interested in buying it from a "cool" store. If they are like most people, they want the cheapest price, and a box of corn flakes while they're there.
That said... GME is waaaay over sold right now. Just my 2 cents.
Promotional price activity and price competition are code words for declining prices which means downward pressure on gross margins and therefore also downwardly mobile net operating margins which means lower earnings per share and revenues going down at the same time due to other big box retailers selling the same stuff.