It's bad enough that GameStop's (NYSE: GME) business model has been assaulted by a meandering video game industry, developers shifting to digital distribution, and the rise in popularity of casual gaming through social networks and smartphone apps.
Now even GameStop's bread-and-butter business of buying back used games for a pittance and selling them again at healthy markups is threatened. Best Buy (NYSE: BBY) announced this week that it will begin buying back used games through 600 of its consumer electronics superstores.
It's also raising the stakes, offering $20 in Best Buy gift cards on more than 100 popular titles beginning Sunday. Several offline and online retailers have threatened to invade GameStop's high-margin turf, but Best Buy is finally making an aggressive push.
Look at the bright side, GameStop. A new Halo game is coming soon.
Briefly in the news
And now let's take a quick look at some of the other stories that shaped our week.
- Yahoo! (Nasdaq: YHOO) completed the outsourcing transition by handing over its organic search to Microsoft's (Nasdaq: MSFT) Bing. Somewhere out there, a Yahoo! yodel fades into the mountainside.
- Pacific Sunwear (Nasdaq: PSUN) isn't any closer to a turnaround, posting a wider operating loss in its latest quarter. Comps fell 10%, which is very problematic when one considers that PacSun's comps fell 24% during the same quarter a year earlier.
- Deutsche Bank downgraded shares of Baidu (Nasdaq: BIDU), fearing that the stock's capital appreciation is limited in the near term. It's easy to be skeptical on the call, since Wall Street has typically underestimated Baidu's earnings power.
- Trina Solar (NYSE: TSL) posted better than expected quarterly results, once again validating the attractiveness of the solar energy industry.
Until next week, I remain,
Rick Munarriz
