A survey of 8,000 teenagers announces bad news for GameStop

Teens love video games. Nowhere is this better illustrated than in Piper Jaffray's latest survey, Taking Stock, which helps non-teens better understand teen eating habits.

According to the survey, teens spend 14% of their budget on video games. It's more than anything else apart from the necessities of life like food and clothing. Free games like the popular "Fortnite" and, more recently, "Apex Legends" also help attract new players and, surprisingly, force more players to pay for premium games.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "In addition, 60% of all teenagers said they now prefer to download their games rather than buying physical media, up from 55% last year and 45% the year before, which is a huge advantage for game publishers. also a serious problem for the video game retailer GameStop (GME). "Data-reactid =" 17 "> What's more, 60% of teens said they now prefer to download their games rather than buying them on physical media, up from 55% last year and 45% over the same period. the previous year, which is a significant benefit for game publishers, but it also poses serious problems for the GameStop (GME) video game retailer.

The game is only growing

In his survey, Piper Jaffray spoke with 8,000 GenZ members in the United States, the cohort of people born between 1997 and 2012 who compared all other people in the world to geriatrics. Teens reported spending $ 2,600 a year, which is $ 77 billion if it affects the entire teenage population in the United States.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Teenagers, in particular, spent the most time in the world. money in games, while teenagers spent 1% of their budget on video games, which contrasts sharply with the gender distribution of players of all ages, which, according to a study by & nbsp;Statista game industry research companyindicates that players are composed to 55% of men and 45% of women. "data-reactid =" 20 "> Adolescents, in particular, spent the most on games, while teenagers spent 1% of their budget on video games, the distribution by sex of players of all ages, who According to a study by research firm Statista, reveals that players are composed to 55% of men and 45% of women.

According to analyst Mike Olson of Piper Jaffray, the difference could be related to the age of the respondents. Women tend to play games on mobile platforms, said Olson, and mobile gamers tend to be older, which is why the teen survey shows that games are so biased toward men.

Interestingly, although free games have already been considered a potential threat to the high-end gaming market, Piper Jaffray's poll shows that free titles can encourage teens to spend more on paid games.

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The survey asked teens how games like "Fortnite" were affecting their decision to buy other games: 13% of them said they were counting buy more games after playing at the hit of Epic Games, compared with 7% in the fall of 2018. In addition, the number of teens who said they would buy fewer games decreased by 37% to 36%, which means that "Fortnite" encourages teens to buy more titles.

This should be a boon to game publishers and developers, but it will probably not help retailers selling physical copies of games.

The future of Gamestop announces darker

The main reason for the increase in the number of game downloads is that it is easier to buy a game online and download it in less than an hour than having to go to a store to buy a physical drive. or a cartridge.

<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Downloads are also an advantage for companies like EA (EA), Take-Two Interactive (TTWO), Activision Blizzard (ATVI), Ubisoft and other publishers will see improved margins as they reduce the production of disks and cartridges. "Data-reactid =" 38 "> Downloads are also an advantage for companies like EA (EA), ATVI, Activision Blizzard (ATVI), Ubisoft and other publishers, will see their margins improve as the production of disks and cartridges is reduced.

But the gains of the publishers are the loss of GameStop. Beyond the loss of revenue generated by the lower number of customers buying physical games, the company will continue to see a decrease in the number of people trading old titles. GameStop uses games traded to sell them with a higher margin than the new games.

In addition, online retailers are already drastically reducing the price of games just weeks after their launch on the market. Players are no longer forced to buy used games to save a few dollars compared to new copies.

<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "The addition to the woes of GameStop is the next Google's collection of streaming games services (GOOG& nbsp;GOOGL), Ubisoft, Microsoft (MSFT) and Nvidia (NVDA), among others. According to Mr. Olson, Microsoft and Sony are also expected to release in 2020 versions of their game consoles without a disk drive by 2020, which would have an additional impact on GameStop. The next generation of streaming gaming services offered by Google (GOOG, GOOGL), Ubisoft, Microsoft (MSFT) and Nvidia (NVDA), among others. hard drives at some point in 2020, which would have an additional impact on GameStop.

One thing is certain, though. The game will not go away anytime soon.

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "More from Dan:"data-reactid =" 43 ">More from Dan:

<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Send an email to Daniel Howley at [email protected]; follow him on Twitter at@DanielHowley. Follow Yahoo Finance on Facebook, Twitter, Instagram, andLinkedIn.finance.yahoo.com/"data-reactid =" 48 ">Send an email to Daniel Howley at [email protected]; follow him on Twitter at@DanielHowley. Follow Yahoo Finance on Facebook, Twitter, Instagram, andLinkedIn.finance.yahoo.com/