GameStop (NYSE:GME) is doomed. Or at least that's the prevailing sentiment on the stock these days. If you believe the hype, the video game retailer is poised to get crushed by everything from streaming video games to digital downloads to Wal-Mart (NYSE:WMT). But given that GameStop just set a new market-share record over the holidays, could these fears be a tad overblown?
In the video below, Fool contributor Demitrios Kalogeropoulos argues that they are, highlighting a few reasons that the bears have this stock all wrong. For one, GameStop's recent earnings slide wasn't the result of competitors winning business, but was instead due to GameStop's shifting sales mix. Yes, the record launches of next-gen consoles from Microsoft and Sony have dampened GameStop's profitability, but that problem will reverse itself with time.
Second, Demitrios argues that investors shouldn't panic over Wal-Mart's entry into the market for used video games. The retailing giant, and many others, have tried to compete in this business before -- and failed. That shows just how tough it can be to tack a pre-owned video game segment onto your larger retail business. And finally, GameStop's stock price is compelling right now at almost 30% off since November and at just 14 times the $3 it earned over the last year.