GameStop stock price drops after Microsoft announces Xbox Digital Game Pass

Just in case you missed the latest news coming from camp Xbox, Microsoft revealed that it will be implementing a new premium membership service called Xbox Game Pass for Xbox One which will give gamers instant access to a library of Xbox 360 and Xbox one digital games.  Depending on whether you want to use the service, this could make you very happy, but there is one company not so happy about it.

GameStop, one of the nation’s biggest retailers of used games, felt a small shock wave once the news hit. GameStop’s stock has dropped nearly 8% today. This program gives Xbox One owners the ability to pay $9.99 per month to have unlimited access to over 100 Xbox One and backward-compatible Xbox 360 games. Of course, these are all digital games that you download from Microsoft’s Xbox Game Store, and it’s likely that investors are seeing this as a major threat to GameStop’s business model.

Not only would this move push gamers to invest in the digital service where they can get access to games from the comfort of their own homes but it could potentially eliminate the need for gamers to outright purchase used games when they can download and use multiple games without limit for a small cost.  The brick-and-mortar retailer makes quite a lot of its money from secondhand sales where it resells products that consumers have traded in.

This is a bold move by Microsoft in what could completely change the way the used game market works, but in a similar fashion, Sony has been unable to hit a home run with their digital Playstation Now service.  Xbox Game Pass will be coming later this spring 2017.

 

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