GameStop (NYSE:GME) is winning the game for investors these days. Shares of the leading stand-alone video game retailer hit a four-year high on Tuesday.
In this video, Rick argues that it will be all downhill from here for GameStop stock.
Bulls argue that the new console cycle will help lift GameStop's sluggish comps, but that certainly wasn't the case with the Wii U in November, and it's hard to get too excited about the next wave of shiny new systems out of Sony (NYSE:SNE) and Microsoft (NASDAQ:MSFT).
Sony has already announced that the PS4 will be running on a new chip architecture that prohibits compatibility with older games, and that's going to sting GameStop's resale business. Microsoft has yet to reveal specs for the heir apparent to its Xbox 360, but it's a safe bet that it will emphasize digital downloads, potentially bypassing physical retailing.
GameStop's fat dividend and attractive unit economics may seem appealing now, but it won't seem that way as store traffic starts to thin out. GameStop stock is probably going lower.
Longtime Fool contributor Rick Munarriz has no position in any stocks mentioned. The Motley Fool owns shares of GameStop and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.