Read the WHOLE post. Writing on the wall.
Studios closing industry wide every year.
Retailers shrinking shelf space for games.
GameStop shareholders in a near panic.
AAA publishers depend on retailers to make those enormous $100 million investment numbers back. As retailers buy fewer and fewer games...It's coming, unless something changes.
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If the X games only had Elites flight model, I could say a permanent farewell to ED...
The games industry is inexorably moving more towards digital distribution, the same way the home movie industry has done. Retailers like Target (whose primary business is not games, or even electronics in general), are paring down their selection to items that are likely to turn, but their games section will not completely disappear any more than the movies have. The selection, however, will certainly be less than what is was in the past. That was the only way to get games to market on a large scale in the past, but this is no longer true, and not only is digital distribution cheaper, but it has other benefits, like last-minute bug fixes or content additions that don't make it onto the physical media before it goes Gold.
Retailers like GameStop (whose primary business is games, the physical media versions of them specifically) certainly took notice when Blockbuster did not move quickly enough to change their business model. That is why you are starting to see other things in GameStops, like shirts, hats, lanyards, and other types of gamer culture merchandise. Their core business will certainly take a large hit (compared to what it has been) as publishers move more of their content to exclusively digital distribution, but if they can establish themselves as the place to get physical media, older games/systems, and things that are generally part of gamer culture, then they will be able to weather the changes, and continue being in business. As an additional bonus, these items provide a boost to both revenue, and gross margin until then.
Game studios (like other businesses) close all the time, and new ones open. That's just how business works - unless you are claiming that the games industry is on the verge of a major contraction like in the early 80's? There will be contractions (no industry continues to grow infinitely), but we aren't there yet, and it really won't be a large one, in any case.
I'm just going to walk away from your "gamers in the know" comment. I think I've already addressed that in this post.
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