Pachter: Console Death Will Take Decades, GameStop Has at Least 20 Years

30th September, 0 replies

Wedbush Morgan analyst Michael Pachter expects the death of video game consoles to be prolonged and to last several decades.

"I think the console death will take decades," Pachter told MCVUK. "That means that GameStop has at least another 20 years to sell DVDs. I think that the decline in physical game sales hurts GameStop the least, as Amazon and Best Buy customers are far more inclined to buy online than GameStop customers, due to the latter’s predominant position in the used games business."

Pachter noted that music CD sales are down 80 percent from their peak 18 years ago, however record labels still manufacture CDs. Similarly, DVD and Blu-ray disc sales are down 50 percent from their peak but they're still released. So while physical game sales might decline in the coming years there will be an audience to sell physical games to for many years to come.

Pachter also discussed the closure of RadioShack and Blockbuster, and argued that GameStop is in a different position.

"RadioShack was put out of business by crushing debt (GameStop has none) and very slowly declining sales due to their irrelevancy," he said. "Blockbuster was put out of business not by digital downloads or streaming video, but by lower-priced Redbox, whose sole business is renting physical DVDs. There is no analogy for GameStop."

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