GameStop Falls After Report Xbox Will Block Used Games
GameStop Corp., the chain that gets almost half its profit from used video games, fell the most in a month after a website reported Microsoft Corp.’s next console will block users from reselling titles.
GameStop fell 6 percent to $25.20 at the close in New York trading, their biggest drop since Jan. 8. The shares have gained 7.6 percent in the past year.
Microsoft’s next console will include technology that registers video games over the Internet and renders resold titles useless, the gaming website Edge.com said today, without saying where it got the information.
“We do not comment on rumors or speculation,” David Dennis, a spokesman for Microsoft, said in an e-mail. “We are always thinking about what is next for our platform, but we don’t have anything further to share at this time.”
A spokesman for GameStop had no immediate comment.
Michael Olson, an analyst with Piper Jaffray Cos., disputed the report in a research note and said the drop is a buying opportunity.
“We are confident that both the new PlayStation and the new Xbox will support used games,” Olson wrote.
GameStop, based in Grapevine, Texas, derived 27 percent of its revenue from used video-games in the fiscal year that ended in January 2012, according to data compiled by Bloomberg. About 46 percent of gross profit was derived from those products. In its most recently reported quarter, used game sales were 28 percent of revenue and 43 percent of profit.
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