Video game retailer
) unveiled its new business division focused on delivering
superior technological solutions to better serve the changing
needs of today's customers. The business division named as
GameStop Technology Institute ("GTI") will be associated with
leading technology behemoths and academic institutions to obtain
better assistance on innovation as well as research and
) and Center for Retailing Studies at Texas A&M University's
Mays Business School are the co-founding partners of GTI. The
collaboration with Center for Retailing Studies, an eminent
retail education center, will provide GameStop access to
extensive research on retail as well as consumer behavior.
IBM, on the other hand, will provide its expertise to the
entertainment software company on cloud development and design.
GameStop will utilize IBM's cloud development platform,
, to create new cloud and mobile applications (apps). These new
apps will make customers aware of GameStop's latest products
available both in stores and online.
As per management, the incorporation of GTI is an attempt to push
beyond the existing boundaries of GameStop to address the
changing needs and preferences of consumers and compete with
online giants more effectively.
Notably, with rising online competition in the video game
industry, brick and mortar retailers are being compelled to
upgrade services to match their e-Commerce counterparts.
GameStop announced its latest move just before the slated release
of fourth-quarter fiscal 2013 earnings results (Mar 27, 2014). In
January, the company had lowered its earnings outlook as demand
) Xbox 360 and
) PlayStation 3 software was soft during the holiday period. This
resulted in a 22.5% decline in the videogame retailer's new
software category sales, dragging the stock 20% in a single day.
Our proven model also does not conclusively show GameStop as
likely to beat the Zacks Consensus Estimate this quarter. This is
because GameStop carries a Zacks Rank #4 (Sell) and an
of 0.00%. For a stock to outperform, it needs both a positive
Earnings ESP and a Zacks Rank of #1, 2 or 3.
Notably, GameStop has delivered an average beat of 48% in the
last 4 quarters.
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