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The actions of stockbrokers are notoriously erratic (see: The Wolf of Wall Street). Yet even they managed to connect the dots on what streaming PlayStation 3 games to your PS3, PS4, or PS Vita might mean for physical game discs. CVG News reports that following the PlayStation Now announcement, GameStop share prices dropped almost 9 percent–a sizable amount in the stock trade. Why the sudden scare?
Though concrete pricing and functionality details are still uncertain, Sony claims that a subscription to PlayStation Now will eventually grant on-demand streaming access to popular PS3 games. (Sony’s grand plan, as stated during the PS4’s reveal party, is to bring every game released on any PlayStation console to every Internet-enabled device.) “Renting,” as Sony puts it, full games in this fashion would eliminate the need to actually buy these legacy games.
Even if the stock market and its players may or may not be hopped up on cocaine, they seem to be making an astute extrapolation here. See, when you don’t buy new games, you can’t then turn around and sell those games once they’re used. That’s not a particularly worrisome notion to GameStop right now, because let’s face it, PS3 games are not long for this world. What should be worrisome for GameStop, though, is when Sony makes good on its promise for PlayStation Now to work with PS4, PS Vita, and the future.
As has been detailed many times before, GameStop’s business practice preys on the thrifty consumer. New games net GameStop basically no cash, but that used market is booming–and it’s where the vast majority of the company’s profits (as much as 46.6% (opens in new tab)) come from. Considered one way, GameStop is essentially an expensive, commitment-free rental service, where it buys cheap from one consumer, then sells high to another. In theory, PlayStation Now would give you free reign to pick and choose new and old releases as you please, nixing the arithmetical headaches of buying and selling an ever-changing collection.
This isn’t a flat-out death knell for GameStop as a business; traders had the same twitch reaction back in May 2013 when Microsoft proposed some restrictive policies regarding used games on Xbox One. But if PlayStation Now makes good on its promise of providing an instant game library, Microsoft might have to follow suit. And if that happens, the trade-in trade might dwindle to nothingness. To me, GameStop is a bit like Blockbuster: a relic of a bygone era, soon to be outpaced and outdone by the unstoppable behemoth known as digital distribution. I’m not ready to put on my grave-dancing shoes just yet–but you better believe I’m getting them polished in anticipation.
