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GameStop beware: PlayStation Now may ACTUALLY give power to the players

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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%) 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.

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23 comments

  • FoxdenRacing - January 16, 2014 11:15 a.m.

    This wouldn't be such a threat to GS if they weren't so heavily leveraged on Revolving Retail Renting and Overpriced Used to the point it's parasitic on the industry...
  • GamesRadarCollanderCooper - January 9, 2014 7:11 p.m.

    Yeah, but PlayStation Now doesn't give me multiplayer weapon skins for preordering
  • aced11111 - January 9, 2014 6:15 p.m.

    Pc has been in this age.
  • SixSpeedSamurai - January 9, 2014 6:57 a.m.

    Young people are happy to hand over control of their games just like they did with their music. I like to actually own my things. While I do have a lot of Live games and some Virtual Console stuff on my 3DS, I guy 99% of my games offered on physical media via physical media. Not matter what happens to the content provider, I know I can always play that game regardless.
  • jbrasco - January 9, 2014 8:06 a.m.

    As a retro and modern games collector, I think you're missing a bigger factor to this. Connected games. 2 examples, Battlefield 4 and 2K14. I own both physical copies for PS4 and both are crashing a lot. So, being digital or physical did not matter one bit. I can see this being the n
  • G3R - January 8, 2014 10:28 p.m.

    I'm going to miss GameStop!
  • Vonter - January 8, 2014 8:27 p.m.

    Hmm I like renting (mainly because some movie games are only good for one dip). I also didn't have a PS3 and I admit I like some of the most recent exclusives. Add a release date to the Last Guardian/FF XV and I'm in Sony. Still I'll be cautious since Sony doesn't make resistant products.
  • Subgenre - January 8, 2014 7:44 p.m.

    I'm actually more secure with the idea of renting digital games than I am buying them.
  • macrm32 - January 8, 2014 7 p.m.

    The thing that bugs me: what's the point in buying a PS4 or a Vita if a tablet or TV can play these streamed games as well? If, as told, PS4/Vita games will be streamable in the future, why not just buy a TV and keep the iPad?
  • Divine Paladin - January 8, 2014 8:59 p.m.

    I feel like they're REALLY overexaggerating the extent of non-Sony devices, sort of like when they promised a bunch of "classic PlayStation titles" on PSMobile. My theory is that PS3 and above will only work on Sony consoles, handhelds, and maybe TVs. PS2 and prior will eventually spread everywhere because those are (comparably) antiquated. I say this because I can guarandamntee any new titles will stay exclusive to PlayStation until they're a year old (and given the whole bandwidth issue, I doubt any PS3 games will truly work well enough to be considered viable until Google Fiber has launched nationwide/about the time they stop manufacturing PS3s).
  • jbrasco - January 9, 2014 8:09 a.m.

    Thats exactly where Sony is trying to take it. Future proofing the Playstation brand name. All 3 of the big 3 loose millions on hardware. They take that loss and make up on software. So, if you eliminate the manufacturing and R&D of hardware, it could mean more money spent on infrastructure for PS Now.
  • dillon-dunlap - January 8, 2014 6:38 p.m.

    The number one excuse PlayStation users use against people with Xbox Live is boasting that it's free. They should know that a lot of people aren't going to pay for a subscription, let alone one for digital games. Digital PlayStation games will have a tough time filling in the niche next to physical games, that's for sure.
  • Eightboll812 - January 8, 2014 8:02 p.m.

    That was the number one reason, but that was a while back. Most of the comparison today is around the free games with Plus and so forth. I don't know if they will be successful with this model or not, but they've been preparing folks on PS for moving to subscription for a while now.
  • jbrasco - January 9, 2014 8:11 a.m.

    PS+ to get free limited digital downloads or PS Now to stream a large assortment of games, Id rather pay for PS Now and play what I want versus what Im given on PS+.
  • shawksta - January 8, 2014 6:26 p.m.

    Apparently Gamestop WANTS to work with Sony to sell Playstation Now
  • GOD - January 9, 2014 6:29 p.m.

    Well you know what they say: If you can't beat 'em, get in on it as soon as possible to try and save yourself.....
  • Cyberninja - January 8, 2014 6:17 p.m.

    I don't see Digital replacing physical for a long time
  • ParagonT - January 8, 2014 6:55 p.m.

    I think its too late for this console generation, I'm just worried about next. The problem is that consumers think digital and physical can't exist together in tandem, and the other problem is that companies benefit more from just digital only. Digital only on a closed market of the console would mean bad news for consumers. Your games would be tied to that particular provider, making transitioning more difficult to another console each generation. Can't sell it back, online requirement of some kind is going to be a must, and who actually believes they will have lower prices? I mean, you just bought a 400-500 dollar console, you're probably going to deal with any crap that comes up down the line. If Sony and Microsoft does just ONE sale for their console, they have whoever bought tons of games by the balls. Because if they don't pay for Live or PSN or if they never have a sale again, it makes it that much harder to give up all your games tied to the network. Steam has the open platform of the internet, where they have competition. Consoles do not. A better idea is to have physical and digital working in tandem, or at least have a digital marketplace where you can sell your game licenses while giving them a small cut. Then the marketplace makes sure digital prices must stay competitive, and gives you cash back while taking Gamestop out of the equation. Done.
  • Eightboll812 - January 8, 2014 8:20 p.m.

    I think consumers understand that both can coexist, but we are a bit powerless when the companies decide to force the issue. Excellent comment though. Couldn't agree more about the potential perils to consumers. I think there are a ton of people that don't understand the economics enough to realize they are getting a bad deal, but I do think a ton of people do realize it and are starting to wake up and realize that we are going to become slaves to specific content providers. All it would take to fix this is some legislation to update the copyright laws to the digital age, whereby digital providers are required to facilitate changes of ownership. I doubt that will happen soon though.

Showing 1-20 of 23 comments

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