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GameStop Corp. Message Board

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  • razor_05 razor_05 Aug 18, 2011 2:28 PM Flag


    What makes you think the stock is expensive? it trades at 7x earnings, basically has no debt and continues to grow.

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    • Video game sales are going the way of Paperbacks and music.

      E-books killed book stores.
      iTunes killed Tower Records.
      Electronic video game distribution is going to kill Gamestop.

      This is the evolution of things.

      Hence, GME is expensive.

      • 1 Reply to mrnoname001
      • Expensive at any price?

        Additionally, I'm not sure comparing Gamestop to bookstores and tower records is quite fair.

        First, it takes a lot of broadband to electronically play (on the cloud) and download games. Broadband penetration and pricing are limiting factors in electronic delivery of games. It takes WAY more broadband to deliver video games than it does books and music. Note that it wasn't digital streaming that killed Blockbuster, it was Netflix (a hard copy distributor). Plus, a "gaming" PC that requires high end chips to address latency and graphics. Second, to the extent that digital gaming grows, GME at least has a strategy to be part of that shift. Tradtional booksellers and tower ecords never embraced the digital world as GME has. We'll see if they are successful at this in the years to come, but so far results seem promising.

        I understand the concern that this is the next tower records, Borders or Blockbuster, but the final chapter (excuse the pun) hasn't been written.

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