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I think it's obvious that I am holding a substantial amount of GME right now, and I think I should disclose that. Ryan Cohen, the guy who founded Chewy, is on

I think it's obvious that I am holding a substantial amount of GME right now, and I think I should disclose that. Ryan Cohen, the guy who founded Chewy, is on the board for GME and leading an initiative to transform Gamestop into an e-commerce store. In other words he wants to compete directly with Steam, and while many don't realize it yet, Amazon. And this is one of the only people in history who has successfully beat Amazon in a product category before. Chewy absolutely dominated the pet market for e-commerce. What I think Gamestop should do is compete directly with twitch, and set up an online game store on top of that. Basically do what twitch is doing but better, because twitch is shockingly bad for an Amazon acquisition. Then Gamestop could host online game tournaments, and they could even draw attention at local brick-and-mortar stores. They've got the real estate, they've got the brand recognition, and they've got the goodwill of the public right now (which is something you can't even buy, Amazon doesn't have that even with a trillion dollar market cap). I don't think this will happen. But if it did, GME would be ridiculously undervalued right now.

waprin 6y ago
Competing with Twitch is not realistic and I’m surprised you think it’s bad. Facebook and Microsoft have both spent huge sums of money trying to and failed. And both those companies have deep engineering talent which GameStop does not and it will not be trivial to compete with those companies for engineers. Plus livestream is just really expensive in terms of compute and network costs. Finally and most importantly, Twitch has more network effects than people realize with its follower/subscriber ecosystem. Streamers spend a lot of time building that audience and make more money than you might expect when they do it, so it won’t be easy to pull them away.
- Judgmentality 6y ago
  Everybody I know that uses twitch hates it. Like seriously, it's really bad. The conversations streamers have on discord are very different from what they'll say while streaming. They use it because there is no alternative. I am well aware that others have tried to compete and failed. But there is a market and nobody likes the only player. Eventually somebody is going to figure it out. And I am extremely confident it won't be Amazon. I'd short twitch in a heartbeat if it weren't propped up by the most valuable company on Earth.
  - candybar 6y ago
    What in particular do they hate about twitch and what type of streamers are they? (top, emerging, casual, etc). I too hear a lot of complaints about Twitch too but I feel that most of them have nothing to do with the product, but the zero-sum and competitive nature of gaming streaming. It's just difficult to succeed as a gaming streamer (or content creator more generally) and the vast majority of people who try will never make any meaningful amounts of money, so frustrations tend to be attributed to the arbitrary quirks of the platform, even though that's just the nature of any content business.
    - Judgmentality 6y ago
      > What in particular do they hate about twitch and what type of streamers are they? (top, emerging, casual, etc). Everything and everyone. Seriously, even the people making literally millions on twitch hate the DMCA takedowns, the completely capricious bans, the ridiculous barrage of forced ads which twitch has straight up lied about, the fact that Amazon streamed anti-union ads on twitch and then pretended it was an accident, the fact that titty streamers get special priveleges...and that's what I thought of in just 30 seconds off the top of my head. twitch is fucking awful because it's owned by Amazon. It was great before the acquisition and shortly thereafter. I never said it was easy. I'm saying twitch fucking sucks and when somebody makes something that doesn't suck it will instantly be an 11 digit market cap company. Right now the most likely contender is Gamestop, even if I'd only put that at about a 1% chance of happening.
      - candybar 6y ago
        I don't see how any of these are deal-breakers for the viewers and if the viewers are there, the streamers aren't going anywhere. The network effect is real - it doesn't matter how good your streaming platform is if no one is using it.
        Judgmentality 6y ago
        People are leaving twitch because it's so bad. Unfortunately I can't share that data with you, so I don't expect you to believe me. Anyway, let's agree to disagree because we're not finding common ground here.
- syshum 6y ago
  >> Facebook and Microsoft have both spent huge sums of money trying to and failed. That does not mean it is not possible, it is not shocking to me that large institutions like Facebook and MS could not compete even with their deep pockets. you seem to have conflated Money with creativity, and/or vision. it will not be a Microsoft of Facebook that will topple twitch or you tube, it will be a startup of some kind that is completely removed from Corporate culture and the extreme chains on innovation that large companies have
ludocode 6y ago
> I don't think this will happen. Do you mean you don't think they'll compete with Twitch, or you don't think they'll compete with Steam and Amazon? Personally I think investing in GME today is no different than investing in Blockbuster ten years ago. Competing with Steam is a terrible idea. EA tried it with Origin and despite having huge exclusive franchises, they're essentially throwing in the towel by abandoning the Origin branding and moving their newest titles back to Steam. There are also few physical goods to ship anymore so the experience in selling pet supplies online is irrelevant. Something like 80% of PS5s sold are the digital-only model; they don't even have a disk drive (and 99% of modern PCs don't have one either.) Most of GameStop's profit was on used games. A game would get purchased, completed in a few days, then sold back to GameStop. When GameStop re-sells it as used, that's pure profit; the original publisher doesn't get a cut. Rinse and repeat a few times and within a few weeks of the launch of a game, GameStop has made more money off of it than the game developers. This is no longer possible with digital game sales. These games are locked to accounts and cannot be individually transferred. (And if you think GameStop's digital storefront will support game resales to try to capture this profit, no publisher in their right mind would publish their games on it!)
- Judgmentality 6y ago
  > Do you mean you don't think they'll compete with Twitch, or you don't think they'll compete with Steam and Amazon? I do not think Gamestop is going to compete with twitch. I will be very surprised if they do not try to compete with Steam.
  - prepend 6y ago
    This is just crazy though as GameStop has no demonstrated capabilities or plan to compete with Steam. They don’t make good software, they don’t have content or publishing experience. I mean they can say they want to, so can McDonalds. But their plan is magical thinking and not sure why folks fall for this. The worst but though is that they have a terrible reputation with gamers. Every gamer I know hates them. Some shop there like some tolerate Comcast, but they don’t have a fan base.
syshum 6y ago
Does twitch even stream games anymore? ;)
Stratoscope 6y ago
> Chewy absolutely dominated the pet market for e-commerce. Indeed, I think we get as many Chewy boxes as Amazon boxes. Of course three dogs and three cats will do that. Chewy used to send every customer a handwritten personalized Christmas card each year. I think they had every employee spend some time writing these cards when they weren't busy. Later they switched to printed cards using a handwriting font, but those early years of handwritten cards certainly left an impression.
nomadKite 6y ago
You're basing the valuation on Gamestop being able to build, market and compete with twitch/amazon, when they've expressed 0 plans to do so, and are unable to even maintain a website? https://www.gamestop.com/ https://www.gamestop.com/ (down all morning)
candybar 6y ago
How does any of this change GME's valuation? Any company can decide to get into anything - the existence of an opportunity that everyone is aware of doesn't impact the company's valuation unless the company's uniquely suited to exploit the opportunity. I don't see how GameStop is particularly well-situated to take advantage of e-commerce or streaming opportunities. They don't have any unique offerings or substantial online presence. They obviously don't have any real tech or product talent or expertise. They also primarily deal with console games and all new consoles lock you into their own online store. They are suddenly going to compete for 2nd place for PC games? And, Ryan Cohen has no operational role at the company and changing an existing company is very different from building a new one. It's not just having some grand vision, but having the culture and talent to execute on it at every level. And it's unclear Ryan Cohen himself would have any particular expertise here - selling digital goods is very different from selling physical goods.
- ManifestTendy 6y ago
  >I don't see how GameStop is particularly well-situated to take advantage of e-commerce or streaming opportunities I don't massively disagree, but perhaps you underestimate the prevalence of their brand right now. Gamestop is salient in the gaming and internet communities. What of 'irrational' consumer behavior?
jasonwatkinspdx 6y ago
Twitch in essence is a giant ad for Prime. That's it. It's doing exactly what they want. It's a terrible business to try and make profitable as its own silo, which is why mixer et all have failed. The only thing happening with GME is some opportunistic behavior around their sudden unexpected ability to raise speculative capital. Jeff Bezos himself could take over GME and there is zero chance it's going to become some sort of online ecommerce competitor to steam. They have absolutely no comparative advantage for that. All that's happening is GME management finding every way they can to redirect this influx of cash into their bonuses.

waprin 6y ago

Competing with Twitch is not realistic and I’m surprised you think it’s bad. Facebook and Microsoft have both spent huge sums of money trying to and failed. And both those companies have deep engineering talent which GameStop does not and it will not be trivial to compete with those companies for engineers. Plus livestream is just really expensive in terms of compute and network costs. Finally and most importantly, Twitch has more network effects than people realize with its follower/subscriber ecosystem. Streamers spend a lot of time building that audience and make more money than you might expect when they do it, so it won’t be easy to pull them away.

Judgmentality 6y ago
Everybody I know that uses twitch hates it. Like seriously, it's really bad. The conversations streamers have on discord are very different from what they'll say while streaming. They use it because there is no alternative. I am well aware that others have tried to compete and failed. But there is a market and nobody likes the only player. Eventually somebody is going to figure it out. And I am extremely confident it won't be Amazon. I'd short twitch in a heartbeat if it weren't propped up by the most valuable company on Earth.
- candybar 6y ago
  What in particular do they hate about twitch and what type of streamers are they? (top, emerging, casual, etc). I too hear a lot of complaints about Twitch too but I feel that most of them have nothing to do with the product, but the zero-sum and competitive nature of gaming streaming. It's just difficult to succeed as a gaming streamer (or content creator more generally) and the vast majority of people who try will never make any meaningful amounts of money, so frustrations tend to be attributed to the arbitrary quirks of the platform, even though that's just the nature of any content business.
  - Judgmentality 6y ago
    > What in particular do they hate about twitch and what type of streamers are they? (top, emerging, casual, etc). Everything and everyone. Seriously, even the people making literally millions on twitch hate the DMCA takedowns, the completely capricious bans, the ridiculous barrage of forced ads which twitch has straight up lied about, the fact that Amazon streamed anti-union ads on twitch and then pretended it was an accident, the fact that titty streamers get special priveleges...and that's what I thought of in just 30 seconds off the top of my head. twitch is fucking awful because it's owned by Amazon. It was great before the acquisition and shortly thereafter. I never said it was easy. I'm saying twitch fucking sucks and when somebody makes something that doesn't suck it will instantly be an 11 digit market cap company. Right now the most likely contender is Gamestop, even if I'd only put that at about a 1% chance of happening.
    - candybar 6y ago
      I don't see how any of these are deal-breakers for the viewers and if the viewers are there, the streamers aren't going anywhere. The network effect is real - it doesn't matter how good your streaming platform is if no one is using it.
      - Judgmentality 6y ago
        People are leaving twitch because it's so bad. Unfortunately I can't share that data with you, so I don't expect you to believe me. Anyway, let's agree to disagree because we're not finding common ground here.
syshum 6y ago
>> Facebook and Microsoft have both spent huge sums of money trying to and failed. That does not mean it is not possible, it is not shocking to me that large institutions like Facebook and MS could not compete even with their deep pockets. you seem to have conflated Money with creativity, and/or vision. it will not be a Microsoft of Facebook that will topple twitch or you tube, it will be a startup of some kind that is completely removed from Corporate culture and the extreme chains on innovation that large companies have

ludocode 6y ago

> I don't think this will happen. Do you mean you don't think they'll compete with Twitch, or you don't think they'll compete with Steam and Amazon? Personally I think investing in GME today is no different than investing in Blockbuster ten years ago. Competing with Steam is a terrible idea. EA tried it with Origin and despite having huge exclusive franchises, they're essentially throwing in the towel by abandoning the Origin branding and moving their newest titles back to Steam. There are also few physical goods to ship anymore so the experience in selling pet supplies online is irrelevant. Something like 80% of PS5s sold are the digital-only model; they don't even have a disk drive (and 99% of modern PCs don't have one either.) Most of GameStop's profit was on used games. A game would get purchased, completed in a few days, then sold back to GameStop. When GameStop re-sells it as used, that's pure profit; the original publisher doesn't get a cut. Rinse and repeat a few times and within a few weeks of the launch of a game, GameStop has made more money off of it than the game developers. This is no longer possible with digital game sales. These games are locked to accounts and cannot be individually transferred. (And if you think GameStop's digital storefront will support game resales to try to capture this profit, no publisher in their right mind would publish their games on it!)

Judgmentality 6y ago
> Do you mean you don't think they'll compete with Twitch, or you don't think they'll compete with Steam and Amazon? I do not think Gamestop is going to compete with twitch. I will be very surprised if they do not try to compete with Steam.
- prepend 6y ago
  This is just crazy though as GameStop has no demonstrated capabilities or plan to compete with Steam. They don’t make good software, they don’t have content or publishing experience. I mean they can say they want to, so can McDonalds. But their plan is magical thinking and not sure why folks fall for this. The worst but though is that they have a terrible reputation with gamers. Every gamer I know hates them. Some shop there like some tolerate Comcast, but they don’t have a fan base.

syshum 6y ago

Does twitch even stream games anymore? ;)

Stratoscope 6y ago

> Chewy absolutely dominated the pet market for e-commerce. Indeed, I think we get as many Chewy boxes as Amazon boxes. Of course three dogs and three cats will do that. Chewy used to send every customer a handwritten personalized Christmas card each year. I think they had every employee spend some time writing these cards when they weren't busy. Later they switched to printed cards using a handwriting font, but those early years of handwritten cards certainly left an impression.

nomadKite 6y ago

You're basing the valuation on Gamestop being able to build, market and compete with twitch/amazon, when they've expressed 0 plans to do so, and are unable to even maintain a website? https://www.gamestop.com/ https://www.gamestop.com/ (down all morning)

candybar 6y ago

How does any of this change GME's valuation? Any company can decide to get into anything - the existence of an opportunity that everyone is aware of doesn't impact the company's valuation unless the company's uniquely suited to exploit the opportunity. I don't see how GameStop is particularly well-situated to take advantage of e-commerce or streaming opportunities. They don't have any unique offerings or substantial online presence. They obviously don't have any real tech or product talent or expertise. They also primarily deal with console games and all new consoles lock you into their own online store. They are suddenly going to compete for 2nd place for PC games? And, Ryan Cohen has no operational role at the company and changing an existing company is very different from building a new one. It's not just having some grand vision, but having the culture and talent to execute on it at every level. And it's unclear Ryan Cohen himself would have any particular expertise here - selling digital goods is very different from selling physical goods.

ManifestTendy 6y ago
>I don't see how GameStop is particularly well-situated to take advantage of e-commerce or streaming opportunities I don't massively disagree, but perhaps you underestimate the prevalence of their brand right now. Gamestop is salient in the gaming and internet communities. What of 'irrational' consumer behavior?

jasonwatkinspdx 6y ago

Twitch in essence is a giant ad for Prime. That's it. It's doing exactly what they want. It's a terrible business to try and make profitable as its own silo, which is why mixer et all have failed. The only thing happening with GME is some opportunistic behavior around their sudden unexpected ability to raise speculative capital. Jeff Bezos himself could take over GME and there is zero chance it's going to become some sort of online ecommerce competitor to steam. They have absolutely no comparative advantage for that. All that's happening is GME management finding every way they can to redirect this influx of cash into their bonuses.