Sony’s recent PlayStation Now announcement has resulted in a significant negative impact on GameStop’s stock.
Conversely, Sony and third-party companies that publish on PlayStation platforms all saw rises in stock.
Wedbush analyst Michael Pachter was quick to chime in on the matter, stating PS4 hardware sales are far too strong for the retailer to be in any immediate trouble.
"I have to laugh about this: Sony’s sell-through number helps GameStop MUCH MORE than the launch of PS Now hurts them, yet GameStop shares getting hammered,” Pachter wrote.
"The sell-off in GameStop shares that followed the PS Now announcement is overdone. We expected Sony to announce a streaming gaming service ever since its acquisition of Gaikai in 2012. It is unclear which games will be available (we expect older first-party titles primarily) on the service and equally unclear what Sony intends to charge for subscriptions or for rental.
Game streaming services have been spectacularly unsuccessful in the past, as evidenced by the bankruptcy of OnLive in 2012. We believe OnLive’s struggles were attributable to poor uptake of the service (peaking at an estimated 300,000 users), and we believe that the lack of quality content was the main reason that the company had difficulty attracting subscribers.”
Pachter also noted that PS4’s lack of backwards compatibility with physical PS3 games means offering digital PS3 titles through PlayStation Now won’t have a negative impact on PS3 retail sales – since they were never available for the PS4 to begin with.
"It is important to note that PS4 has no backwards compatibility with PS3 discs, meaning that the availability of PS3 digitally streamed games will not directly result in lower used sales of PS3 games to PS4 owners. GameStop’s used gaming sales from PS3 discs on PS3 consoles are most likely to be impacted; however, until we know more about game availability, timing, and pricing, among other factors, we do not see a meaningfully negative impact to GameStop in the near-term.
Our bias is that this service will attract fewer than 1 million subscribers, and will impact overall game sales by 1—2 percent in the aggregate over the next five years."