More gamers are choosing to directly download video games to their computers and consles, skipping trips to brick-and-mortar retailers and ultimately damaging GameStop's bottom line. According to Gamer World News Entertainment Host Tian Wang, stores that sell physical copies of video games may be made obsolete by cloud-based streaming services.
"It's going to be a difficult situation for GameStop," Wang told FOX Business' Stuart Varney on Wednesday. "It's pretty safe to say that 2018 was the worst year ever in the company's history."
Wang blamed GameStop's financial troubles on the overall shift from physical to digital media. GameStop relies heavily on the sale of pre-owned, physical copies of games. Those sales dropped by 21% in their latest quarterly report.
GameStop may survive a while longer on the expected release of two next-generation consoles from Microsoft and Sony, Wang said, but the company would have to focus on hardware sales - consoles and accessories - instead of the games played on those devices.
"If you look at the long-term trend, that line of revenue could disappear entirely because everything is going the way of cloud gaming," he said.
Wang added that GameStop will "take a page out of the out of home market by leaning heavily on esports" in order to "salvage their business."