The wave of digital disruption is becoming a digital tsunami. After wiping out (or threatening to destroy) decades-old operating models in the music, movie, and publishing industries, that wave is now swelling over the video game industry.
You might think that video game businesses would be quick to catch on to an all-digital distribution method, since the core product of the entire industry is nothing but bits and bytes in the end. But video game retailer GameStop
In other words: The emperor has no clothes.
Adding insult to injury, GameStop CFO Cathy Smith announced her departure the very same day as that scathing analyst report. Only six months after leaving homebuilder Centex Homes, Smith takes another career step and joins Wal-Mart Stores
But Smith's exit might just move her from one outdated business model to a bigger version of the same thing. The Internet puts downloaded games right at the consumer's fingertips. And it's not just for PCs anymore; modern video game consoles like the Sony
So Gikas is exactly right if you ask me: GameStop deserves to take a beating, because the company's very business is an endangered species. Do you agree with this harsh appraisal of GameStop? Disagree? Either way, let your voice be heard in the comment box below.
Fool contributor Anders Bylund holds no position in any of the companies discussed here and plays nothing but music-oriented video games. Microsoft and Wal-Mart Stores are Motley Fool Inside Value choices. Activision Blizzard and Electronic Arts are Motley Fool Stock Advisor recommendations, and GameStop is a former Stock Advisor pick. Motley Fool Options has recommended a synthetic long position on Activision Blizzard and a diagonal call position on Microsoft. The Fool owns shares of Activision Blizzard. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.