So i have been prompted to look at it, In the past i have dealt with the stock.
I first looked at the chart and noticed the trend, a drop in price in Nov and December followed by a rise in Feb and March. Should history repeat itself thats an easy 20-30% in the bag.
But im having doubts as to whether this will happen. I have been past a few GAME shops my self..yes loads of teenagers in there etc
But we are in the early stages of a GAMES cycle with the release of the XBOX360 recently people would want to get their hands on this. However having asked for an XBOX i have been told its sold out.
Why would people buy old stuff for PS2 and XBOX when new gear is just round the corner? PS3 should be out sometime soon.
For this reasons GAME is forced to reduce prices to shift their stock hence why there are so many kids buying games and margins are under intense pressure thus profits will be slim therefore the share price could continue to slide.
Also with the increased competition from giants such as Tesco and Sainsbury's selling computer games this will hurt babies like GAME. This adds to whats already been a tough retail climate.
I was watching TV the other night and saw how people can download decent games for as cheap as $20 interesting stuff, why would people pay £40 for a game?
Supply for the XBOX360 will be very tigh atleast for the next few months, so no XBOX360 then no profits for GAME.
The reason GAME is still holding up at this price is due to takeover talks...i think it could easily shed of a few more pennies of the share price at which point it could present an excellent opportunity to get in for the medium term i.e. 2-3 years allowing one to benefit from the new game cycle including the release of the Nintendo and PS2 consoles.
