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Pachter: GameStop's Gamestation error

Wedbush Morgan analyst Michael Pachter believes that US retailer GameStop made a "strategic error" in not acquiring UK chain Gamestation, allowing GAME to do just that, and closing off a growth route for GameStop in the process.

Wedbush Morgan analyst Michael Pachter believes that US retailer GameStop made a "strategic error" in not acquiring UK chain Gamestation, allowing GAME to do just that, and closing off a growth route for GameStop in the process.

"GameStop always had the capacity to make inroads in Europe, but for some reason, expansion there has been painfully slow," he told videogaming247.

"I think they made a strategic error in not buying Gamestation, allowing GAME to get even bigger and placing them at a competitive disadvantage in the UK.

"The rest of Europe is wide open (Micromania is strong in France), and I expect GameStop to do well on the Continent."

He also stated his belief that despite yesterday's financial results, which showed USD 7.1 billion in sales, the likes of Wal-mart and Target are likely to remain unruffled.

"I don't think GameStop's growth plans in the US are much different than in past years (300 stores), and don't see their 'mom friendly' format sending shivers down Wal-Mart or Targetâs spines," said Pachter.

"Moms are not making a separate trip to GameStop if they find what they want during their regular trips to Wal-Mart."

GameStop has announced that it plans to open as many as 600 new stores in the coming financial year.

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Phil Elliott

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