PS5 and Scarlett Will Support Retail, but Digital Is Growing: What’s the Future for Gamestop?

Gamestop USA:

With the approach of the next-gen, many people wonder how the business of the videogame industry will change, and what will be the determining factors for the financial success of the major protagonists of our medium.

While it is true that Sony and Microsoft have already confirmed their support for the physical format with the arrival of PlayStation 5 and Xbox Scarlett, it is undeniable that the digital market now plays a central role in the growth of all the companies involved in this sector.

As noted by Dr. Serkan Toto, CEO of the consulting company Kantan Games, about 70% of the financial revenues of western companies today come from digital sales, but for two years now Japanese publishers such as Square-Enix, Capcom have also been and also Nintendo have seen a net increase in this regard. In addition, more and more development studies are focusing on free-to-play formats, Game as a Service and begin to support cloud gaming: all trends that are certainly not good for traditional retailers, who are inevitably chasing each other in trouble.

According to American investors, in this case, represented by the statements of the famous Michael Burry (which perhaps you will remember for the movie “La Grande Scommessa”), I am however convinced that physical retailers, first of all, GameStop, will not have so many problems to survive in this constantly changing market. The reason, as mentioned above, is that both PS5 and Xbox Scarlett will still focus on the physical format. However, the numbers published by Kantan Games appear quite unforgiving and a structural change from GameStop would seem necessary: ​​the company itself (which meanwhile continues with staff cuts ) stated in previous weeks that it wanted to take counter measures to best adapt to the increasingly tangible change of the industry.