GameStop "biggest beneficiary" of concurrent PS4, next Xbox launches

Analyst Michael Pachter expects the next Xbox this fall as well and sees GameStop doing very well as a result

Sony is preparing to launch its PS4 this holiday season, and while some had expected Microsoft to wait until 2014 to push out its next Xbox, Wedbush analyst Michael Pachter now sees that as an unlikely scenario. There will be a true next-gen battle at Christmas and leading games retailer GameStop may be the biggest winner in the race, he said.

"We have high hopes that the PS4 and next Xbox launches will renew investor interest in the publishers," Pachter said in a note today, adding that Activision's stock has the "most potential." The biggest gains, however, may be seen by GameStop.

"We expect Microsoft to announce its console in the next few months, and at the latest at the E3 Expo in mid-June. Although we think that Microsoft aspires to position the next Xbox as the entertainment hub in the living room, suggesting a possible launch delay, we think that the company is intent upon gaining further market share next cycle. As such, we think that the company intends to launch alongside the PS4, and we expect gamers to have two next-generation consoles to choose from this fall," Pachter commented.

"The biggest beneficiary of all this is GameStop," he continued. "The company thrives in a product refresh cycle, and its used business typically spikes, as many gamers trade in old systems and software to generate currency so that they can buy new systems. There has been some speculation that the PS4 and the next Xbox will block used games, but Sony's studio head, Shuhei Yoshida, stated firmly that the PS4 will not block used games. We think that Microsoft would be foolhardy to do so if Sony does not, as we believe that gamers will favor the console that provides them the greatest number of options; in our view, should one manufacturer block used games and the other doesn't, the latter manufacturer would most likely gain more than 20 percent market share. Accordingly, we do not expect either console to block used games, and we expect GameStop shares to rally for the balance of the year."

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Latest comments (3)

Shaun Farol Studying Computer Information Systems, California Polytechnic State University5 years ago
Nice to see an analyst recognize the role that used games play toward the purchase of new hardware/software. Typically the only picture anyone is willing to paint is how retailers like GameStop are destroying the industry and stealing money out of hard working dev's pockets... alas if only it were that simple.
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Paul Jace Merchandiser 5 years ago
Actually the "biggest beneficiary" of a concurrent PS4 and Next Box launch would be us gamers. Along with those two systems we'd have the Wii U, the three current gen systems, PC and mobile/tablet games. With so many choice gamers will be the real winners, although our wallets are going to take a bit of a beating. But as they say, variety is the spice of life.
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Adam Campbell Game Production Manager, Azoomee5 years ago
Well, I would hope a game shop can profit from a console release.
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