GameStop has at least "10 years of runway" left, says Pachter

GameStop still has at least a full decade in front of it before the digital market puts an end to the retail chain for good, according to Wedbush analyst Michael Pachter.

Games Industry reports on Pachter’s latest investment note, which states that GameStop won’t be going quietly into the night in the face of the digital revolution.

"We…think that GameStop has at least 10 years of runway left in its core business," Pachter said.

"In the meantime, the company is leveraging its pre-eminent position in selling used game consoles into a strength in offering used smart phones, tablets and other consumer electronics, and we expect substantial growth from this category over the next several years."

"GameStop management has consistently returned the company’s free cash flow to investors, and we expect them to continue to do so, suggesting to us that EPS growth will continue for much of the next decade."

GameStop is now benefitting significantly from selling used devices, and – with the recent policy changes from Microsoft in mind – next-gen consoles are expected to be a boon to GameStop’s pre-owned business as well.

"With the status quo remaining largely in place for used gaming on next gen, the transition of sales from physical to digital should be quite slow. GameStop’s PowerUp Rewards program should enable continued market share gains and position it to be the ‘last man standing’ for physical sales."