This Won’t End Well for GameStop Corp. (GME)

Sony also outshines at distribution in the Asia Pacific region, and this is the selling point of the company. The market for smartphones is only in the beginning stages of growth. IDC estimates that the smart phone market will double between 202 and 2016 to 1.4 billion units. Sony will get a small piece of the action which will still mean large returns on investment for the company and the shareholders.

Microsoft is so good at making money

I have to admit I am a massive fan of Microsoft Corporation (NASDAQ:MSFT) and its current strategy with the next generation consoles. The company is on track for growth as its consumer electronics and entertainment division was able to grow revenues by 56% year-over-year in Microsoft’s most recent quarter. The company’s growth in the recent quarter was driven by video game sales, increases in Microsoft XBox live subscriptions, and Xbox 360 sales.

After kicking GameStop Corp. (NYSE:GME) out of the distribution system I anticipate that Microsoft Corporation (NASDAQ:MSFT) will earn additional revenue from video game sales. Getting rid of used game sales will optimize the profitability of firms. Consumers will no longer have the option of recycling video games by selling used games to one another.

Conclusion

Investors should definitely steer clear of GameStop Corp. (NYSE:GME). In fact, shorting GameStop then going long Sony and Microsoft could be the best non-directional bet on earth.

The article This Won’t End Well for Gamestop originally appeared on Fool.com and is written by Alexander Cho.

Alexander Cho has no position in any stocks mentioned. The Motley Fool owns shares of GameStop and Microsoft. Alexander is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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