Booze, Baseball, and another "B"

Monday, April 18, 2005

Shenanigans

In news on a topic near and dear to my heart, EB Games is being acquired by Gamestop.

I can't understand the logic behind this deal. EB's stock has always been better than Gamestop, and EB had higher sales last year than Gamestop. *Comparison of the two company's stock.*

From a customer perspective, this is awful news. Where there had previously been bitter competition, and thus a drive to have better prices, service, appearance, etc.; now there is none. Gone is the impetus to have better prices, to get games faster, to be sure to not be undersold, to have better trade-in prices, to have a better return policy, to have better customer service, better locations, etc. On top of that, there's most definitely going to be store closings, which will push even more unfortunate people into a truly horrible job market.

While I understand that these companies feel competition from big-box retailers, joining forces I don't think was the right answer to the problem. People aren't going to stop shopping at Walmart now that Gamestop has doubled in size. While they may argue that this will give them more power to compete, having worked for both companies and knowing upper management from both, I can firmly say that is bogus. On top of that, the videogame market is very close to a fixed-price market anyway. This just furthers that.

Maybe this merger will someday help the push toward a standardized videogame release day that I have advocated for many years (for movies and music it's Tuesdays); that really is the best thing I see coming out of this (other than the +30% increase in EB stock price, which is nice for shareholders, not nice for people who HR wouldn't get back to so as to allow them into the employee stock purchase program).

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