This Prediction From Electronic Arts Should Terrify GameStop Investors
The threats facing GameStop (NYSE: GME) are well-documented at this point. The retailer relies on new and used video games for the majority of its sales and profits, but software sales are increasingly migrating to digital channels -- depriving the company of its biggest and most profitable revenue stream. In order to prepare for this trend, GameStop is undertaking a diversification effort that aims to build up sales of pop culture merchandise, mobile hardware, and wireless and entertainment service packages.
The company's growth businesses have promise, but it needs the video game component to continue putting up solid results in order to bide time for the transformation. However, based on a big prediction from Electronic Arts' (NASDAQ: EA) most recent earnings call, that's a luxury GameStop might not have.
Image source: Electronic Arts.
Source: Fool.com
