GameStop Stock Drops After Sony Patent News

After opening the day at $25.44 per share, GameStop’s stock dipped as low as $24.36 yesterday after word of Sony patenting technology that may harm the secondhand game market by blocking access to previously owned games. At the time of this writing, GameStop’s stock has risen to $24.71.

In response, gaming industry analyst Michael Pachter of Wedbush Securities sent a note to investors expressing his belief that Sony’s patent will not significantly impact the used game market. He wrote:

“Sony benefits little from a unilateral decision to block games. The company’s first party software sales represent less than 10 percent of overall sales on its consoles, and it is unlikely that blocking used games would result in a lift of more than 10 percent in new game sales. That means that Sony’s sales would rise only marginally if the PS4 blocked used games.”

Pachter went on to say that “Sony would be materially hurt if its console blocked used games and competitor consoles from Microsoft and Nintendo did not,” and set a 12-month share price target of $33 for GameStop. He, as well as four other analysts, including Arvind Bhatia of Sterne Agee, considers the reaction to the patent news to be “overblown.”


via Kotaku

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8 Comments on GameStop Stock Drops After Sony Patent News

Elly Morris

On January 4, 2013 at 12:59 pm

I still can’t believe Sony thinks this is a legitimate idea. It’s mind-bogglingly idiotic and will only hasten their irrelevance in the industry. Greedy, short-sighted nonsense.

Mike

On January 4, 2013 at 1:34 pm

The only sad thing for me is that KH3 will most likely be on the ps4, so I’ll have to do some soul searching before that.

Derek

On January 4, 2013 at 4:06 pm

If these companies are really so obsessed with stopping used game sales then they should just follow the rest of the software industry and allow game licensing periods. I buy a ton of games I never finish or never play again so i’d gladly rent a $60 game for a year for $30.

And as many PC gamers know, the used game industry is going to fail anyway since new consoles will be forced to have digital distribution systems to rival the quality and exceptionally low prices available for Steam games. Steam sales, including steam keys sold by Amazon, GMG, and others crush both traditional game disk prices and current digital prices from Sony or Microsoft. Once the steam console puts the pressure on the new xbox and playstation for change, I can’t imagine gamestop staying in business. Not with their failing business model that is.

Wesker1984

On January 4, 2013 at 9:07 pm

How many peoples will lose their jobs because of the arrogance of the giants? We all live in a chained world!

Wesker1984

On January 4, 2013 at 9:10 pm

Hey Derek do you know if Steam got the upper hands in the games market and wins over the home consoles the price of the games will rise?

R.J.

On January 4, 2013 at 11:58 pm

While I hate the idea of locking a game to one person, there is a difference between filing a patent and actually making use of it. Big tech companies have lots of patents that they don’t ever use.

Conor Day

On January 5, 2013 at 12:45 am

There are so many issues that could and will arise with consoles linking games to specific persons that i think its almost impossible to guess what could happen in the foreseeable future, I’m sure in Europe we have legislation that regarding online content that means we outright on what we buy, i’m sure that would have an important impact on this patenting. That is of course if Sony ever go through and implement it, whats to stop them just selling the rights of this technology to other corporate giants. It won’t just be games this will affect

Tasty Muck

On January 5, 2013 at 4:26 am

I think R.J. makes a good point. It’s possible that Sony has actually done this as a safeguard to prevent OTHER companies from using this technology and thus is trying to keep the industry fair to its customers. Maybe I’m being too optimistic but it’s worth keeping an open mind until we get some more information.