GameStop shares fall 6% on report about Xbox

Posted Wednesday, Feb. 06, 2013  comments  Print Reprints

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Shares of GameStop, the Grapevine-based retailer that gets almost half its profit from selling used video games, fell the most in a month after a website reported that Microsoft Corp.'s next console will block users from reselling titles.

GameStop (ticker: GME) fell 6 percent to $25.20 on Wednesday after reported that Microsoft's next Xbox console will include technology that registers video games over the Internet and renders resold titles useless.

"We do not comment on rumors or speculation," David Dennis, a Microsoft spokesman, said in an e-mail. "We are always thinking about what is next for our platform, but we don't have anything further to share at this time."

A GameStop spokesman had no immediate comment. Michael Olson, an analyst with Piper Jaffray, disputed the report in a research note and said the drop is a buying opportunity.

"We are confident that both the new PlayStation and the new Xbox will support used games," Olson wrote.

GameStop derived 27 percent of its revenue from used video games in the fiscal year that ended in January 2012, according to data compiled by Bloomberg. About 46 percent of gross profit was derived from those products.

In its most recently reported quarter, used-game sales were 28 percent of revenue and 43 percent of profit.

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