Why I’m always right.

So, without bragging, I feel I’ve made some accurate predictions about the gaming industry. Here I will elaborate a little on one of them, because I checked the numbers today and I feel pretty accomplished.

About two years ago I figured since I was studying this industry I might as well invest some dollars. So I went out and bought myself $100 worth of GameStop stocks, right around the time they announced their merger with Electronics Boutique. For a grand total of 2.805 shares I paid $34.22 (Well not really, because there was a stock split, but the 34 bucks is my base number). Below is their stock chart since about that time.

Holy moly. It says here that my shares made a 56% increase since I bought them. In addition to GME, I also made some money on a $100 of Activision shares (+36%) and THQ (+13%). However, I lost a bunch on Atari (-a lot) and TTWO (-30%).

Anyway, nonsense aside, for me the big lesson here is that there’s an interesting distinction to be made between media production and distribution companies. Just like the old-line media industry, getting the content piped to consumers is a vital part of the food chain and a healthy consoldition makes for a transparent market and happy profits. In my mind, the only thing threatening GME’s position, besides Wal*Mart and Target etc., is digital distribution. Just like iTunes killed the Tower Records Store, I think GameStop might be in a lot of trouble when games (stand alone, console, episodic, casual) are going to be sold increasingly through digital pipelines and no longer over the counter.

In any event, I’m thinking that maybe I should start a JvD 500 and try to follow the various drivers that move this market. There’s a lot of research out there, if you have the access, but if I can predict a happy increase, so can anyone.