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GameStop Director Sheds $60 Million In Shares
GameStop Director Sheds $60 Million In Shares
October 13, 2009 | By Leigh Alexander

October 13, 2009 | By Leigh Alexander
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    17 comments
More: Console/PC



GameStop director Leonard Riggio has sold 2.3 million shares in the company, in a move that analysts say might be a sign of pessimism on the retailer's near-term prospects.

Riggio -- also board chairman and founder of the Barnes & Noble bookstore chain, which used to own GameStop -- earned $60.2 million through the sale, and lowers his stake in the company to 5.5 percent from 6.9 percent.

"Unless he desperately needs $60 million," it appears that he doesn't think the stock is going to be performing very well, insider trading firm Form4Oracle co-founder Alex Romayev told financial magazine Barron's. "He's got a lot bigger stake in Barnes & Noble. Clearly he thinks selling GameStop is better than selling Barnes & Noble."

Most analysts have been generally positive on the retailer's prospects ahead of the key holiday season, thanks to hardware price cuts, improved year-over-year comparisons likely ahead, and the view of retailers like Best Buy that consumer foot traffic is about to make a return.

But Romayev told Barron's that the last time Riggio made a GameStop shares sale not related to options, he divested just in time to avoid a 62 percent loss.


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Comments


Tim Hesse
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All hail digital downloads.

Maurício Gomes
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GameStop should move here... We would love it!

j kelly
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They never have a shrink wrapped copy of the "new" game, i.e. they sell the "store copy", for profit. Then they will buy the game back from you, at 20% of it's actual worth...less if they can. Then they resell that game for 100% profit. They give nothing back to the gamer, or the game maker...why are they even in existence? Go go digital download. The less middle men, the better off we ALL are.

Mike Siciliano
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"All hail digital downloads."



Hell no. This is industry will kill itself if it tries to go all digital. People want to actually own their games for the simple fact that they can sell them if they suck. Also, you can't wrap a digital download and place it under a Christmas tree.



All hail plastic.

Fiore Iantosca
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j kelly I ask myself that question all the time. I seriously have no idea why kids sell back their games to this Pimp Shop. They could get much more if they sell it on craiglist, ebay, Christ, ANYWHERE except Gamestop!



It just shows me these people selling back the games have no clue of the value of their money. SAD

Chan Chun Phang
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@Jeffrey Parsons:



Solution: instead of just keeping the disc behind the counter, keep the whole shrink-wrapped product behind the counter.



Also I don't know if it's a fluke or an accident, but I once bought a DS game from GameStop, supposedly new and released recently, and it had a save file in it. Stop bothering to search GameStop for games ever since.

j kelly
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@ Mike (and everyone else)



You make a valid point, and don't get me wrong. I like an actual, physical disk, with a new case, and a glossy instruction book, just as much as the next guy. And yes, you can't wrap a digital download, or surprise someone with a digital download. BUT...you CAN wrap a card with 1600 Microsoft points, so that argument doesn't hold water, and is backwards thinking. I grew up with tinker toys and lincoln logs...I wonder how they would fly today?



Here is the problem, and some of you may have experienced this, which is why you eventually went to Gamestop. The big stores, Walmart, Target, and K-Mart, will not supply every new release, they ban certain games. The other stores, Best Buy (and Circuit City, if it is around) usually supply all the new releases...and nothing else. So if you want a game that is 6 months old...you went to go to Gamestop.



{And Amazon is a great alternative...thanks for that one!)





I guess I am not the only one who has experienced the "Pay for a new copy, while they take a disc and put it in a case" phenomenon. I argued with them once. I said "If it's from the publisher, it's shrink wrapped with stickers on the side." They tried to tell me that's not the case. Bullsh*t. There should be a class action lawsuit against them since they are selling games as "new" when they clearly are not "new". Theft cannot be THAT BAD! Keep the new games in the back. They are liars and cheats with this bullsh*t practice.



I've tried craigslist. Some very flaky people out there. I have not tried EBay lately, but it would probably be less of a hassle then GameStop.



Digital download is the solution. The game company doesn't have to take a loss to the middle man. Bye bye middle man! If a game sucks, buyer beware. Read reviews. Talk to friends. Here's an idea: download the demo! I am so glad that Gamestop's days are numbered. Nothing but worthless ticks on the buttcheek of gaming.

Steven Boswell
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I whined about this before on these forums, but hey, it's topical again...



I was looking for a Wii last holiday season, for my nieces (5 and 8 years old). I went to my local GameStop; they said they didn't have any. As I walk out, I see the UPS guy delivering boxes to GameStop, and being a good video game developer, I recognize the model number of the Wii console on the side of one box. So I walk back in, tell them they're about to receive a Wii, and that I'd like to buy it. That's when the saleslady tells me that she's not allowed to sell me one; she'd been ordered, by GameStop corporate, to hold on to all Wiis until after Christmas, and if she sold me one now, she'd lose her job. My nieces ended up not getting a Wii.



I haven't been to a GameStop since. I used to like to go there to buy used video games, but now I just buy them off Amazon. Maybe I'm not the only one peeved by their baffling corporate policies, and it's starting to show in their bottom line.



Kind of like how Circuit City summarily terminated all of their experienced salespeople for being too expensive. Our local newspaper showed a picture of the four people terminated from my local Circuit City; I recognized one as my go-to guy, since he was able to answer all my questions off the top of his head, and made shopping there painless and efficient. I never went to Circuit City again. Big surprise, they went bankrupt about 18 months later.



Ticking off one's customers is bad for business. Guess that's not as obvious as I thought it was.

Mike Siciliano
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"BUT...you CAN wrap a card with 1600 Microsoft points, so that argument doesn't hold water, and is backwards thinking."



Not all games are available for digital download at the moment, so what's really backwards thinking?



I had a thought someone would bring up gift cards. But here's the problem: you still need a store to sell you a physical card. So much for cutting the middle man out. Besides, cards don't have the same impact as an actual game. And Christmas time is usually huge revenue time for the game industry.



Besides, do you think gamers are really going to allow the industry to take away their back-up plan in case a game sucks? They're not going to want to be stuck with a disappointing game.



"Digital download is the solution."



Digital download is not a solution, it is a threat. Gamers aren't demanding it. If they really wanted it, they'd be soaking it up like what happened with Napster.



There is a reason there are multiple retailers, it's so that if you have a bad experience with one you can go to another.

Maurício Gomes
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I see Digital distro as a threat too...



Example, currently my only feasible way to get a game (other than pirating from a nearby pirated games store... and YES that exist here!!!), is Steam and GOG.com... GOG.com sell DRMless games, and I can write them to a CD-R (or whatever-R, or pendrive, floppy... whatever), and use it later, but Steam does not allow me to play without Steam, what happen if Valve folds? (I know that valve going bankrupt is highly unlikely, but it may happen...)



Also, what I do with the copy of Deus Ex that I bought and work like crap on my computer to the point of being only barely playable? (in fact I gave up playing it, it is so buggy and unstable, and I searched so many hours for fixes to have the game half-work...)

Maurício Gomes
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Extra note @anyone that sugested the use of MS card.



They don't work here.

Also I don't buy stuff from MS.

MS has an awfull support and think that I am from Belgium and speak German (I am from Brazil and I speak Portuguese, but when I ask their support how to navigate their Live! configuration pages to fix that, they tell me to re-isntall windows... or MSN... or buy another console, or ditch my 11 year old Passport (then MSN, and now Live!) account)



And getting a plastic card as gift plainly suck.

j kelly
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Digital downloads are threat to who? To you? Why? Do you own a Gamestop? You can't scratch a digital download. The download gets associated with your gamer tag. Lose your harddrive, you get your games from a server. You want your plastic to be in CD shape vs rectangle? I can't help you there. All I am trying to do is tell you what is coming up next generation, and what will probably be the norm by the end of this generation. No more scratched disks. No more middle men leaches. Sorry guys, I welcome the future, both as a game maker, and a game player. I don't know how things play out in Europe, or Japan, I was unaware Gamestop was global. I'll be much happier when they are a footnote on a wiki page.



As far as a company folding...no guarantees in life, only death and taxes. Besides, this industry reinvents itself every 5 years. I don't play pac man on my Atari 2600, I play it on my cell phone now. If Valve folds, which it may, you won't want to play with blocky polygon graphics of today, you'll be playing next generation. Right?

Mike Siciliano
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"Digital downloads are threat to who?"



Consumers.



"To you?"



Yes.



"Why?"



Because I don't actually own the game when I download it. I get a "license" to play it and can't take it to a friend's house or sell it back if it sucks.



"You can't scratch a digital download."



You can't own a digital download. You can't sell it back either.



"No more middle men leaches."



Leeches? What's so wrong with retailers? When did they become the enemies? You don't hear Ford or GM decrying used car lots, so why are game makers acting so different?



"Sorry guys, I welcome the future, both as a game maker..."



Now that explains your position.

Benjamin Quintero
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Digital distribution is a threat for smaller games, but I personally don't care to download 20GB-40GB of Bluray content to play a game. Bandwidth needs to improve before I care about AAA digital downloads and, currently, I don't see a justification to pay an extra $50+/month to have some direct fiber optic backbone run into my home just so I can download these games on occasion.



I prefer best buy over game stop anyhow; I don't agree with game stop pricing of used games and i use my best buy rewards to purchase more than just games; anything from cd, and tv's to water filters and music equipment =). beat that game stop! personally, i think that they can go away and i wouldn't miss them... maybe their game informer; that's actually a decent magazine.

j kelly
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10 years ago, downloading a 1 mb of data took 20-30 minutes for the average user with a 56k modem. Time has a strange effect on technology, it tends to make things go faster, and storage becomes cheaper. I make my prediction based on this fact, coupled with the fact that a game maker can make a better game if they don't have to pay for the distribution of the game.



Go to XNA to see the small indie scene, on PS3 there was an article just yesterday about Sony catering to the small developer. If I am a small developer, I don't have the power or funds to distribute a game via disk. It would cost too much to burn 30k disks that might not even sell, let alone vying for shelf space at the retailer. I know what I am talking about, btw. I have had 1 game I ported put on a shelf at Babbages (Deadly Games, Battle of Britain for PC), I am not making this stuff up. I made 50 cents per game sold, the publisher $6, the game distributer, about $12...Babbages took the rest, $21.50.



Now, I distribute a game on PC, on my own, I make 100% profit. Valve, there was an article just the other day on Gamasutra about their deal, and it sounded better then the standard 15%. With XBLA, or Home, you could make a lot, the trade off being lower percentage vs. huge audience.



If you download a game, you OWN the game. I don't know what the business model for selling downloaded games back to someone will be. My thinking is that the business will adapt and solutions will arise so that gamers and game makers are happy. One idea is repeat customer discount, or being able to sell 2 versions of the game, single and multiplayer.



@ Mike. You keep harping on "What if the game sucks." I already told you TWICE, read a review, download the demo. It would make sense, if it's not already doable, to sign it at a friends house, and play the game that way. I wouldn't know. Any game I want to play at a friend's house is probably multiplayer, and if they don't have a copy, oh well. I'll play whatever he has, or invite him over to my house. TODAY, I know people who won't even lend out games because they don't want them scratched, myself included.



I showed you my cards, I'd like to see yours, Mike. The sell back a game deal sucks bigtime at Gamestop, you need to come back with something stronger then that. Gamestop, die die die! <- COD5

Maurício Gomes
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@J Kelly



You ownly OWN the game when you buy it from GOG.com for now... Because any other location that is tied to your account, you don't own it, the DB owner own it.



Look at Kindle, you own the books that you bought? I don't think so, Amazon deleted a bunch of books from a bunch of people, without any "stealing" lawsuit dropping on them.

Mike Siciliano
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"If you download a game, you OWN the game."



No you don't. You're given a license to play it. Just like World of Warcraft. You have nothing that you can hold in your hand and say, "This is mine!"



"I already told you TWICE, read a review, download the demo."



This is not a solution. I do read reviews, and reviews don't persuade me or dissuade me from buying a game unless the score is universally below 6.5 or so. For instance, Odama was a wobbler for me. The reviews were borderline. But I was ultimately happy that I picked it up. I can't say the same for other games.



Also, I have not been able to download a demo for a SINGLE game I have ever owned. Not one. Granted they're all Nintendo games, but at the moment that is not solution. Demos for DS games are limited at best. There are no Wii demos that I can find.



No review can ever tell you whether you will truly think a game is worth keeping. If a game sucks, I'm selling it back.



"I showed you my cards, I'd like to see yours, Mike."



What cards? For the record, I don't buy used games at GameStop. I use eBay. But I might very well sell a game back to GameStop, depending on what sort of profit I can make.


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