When I look at stocks I start at the big picture and work my way down. Before I look at the financials I look at the overall segment they compete in and their competitors. Do I like where their market is headed and how good are their competitors doing and how are they different. When it comes to video games, everything is doing fine. Not great but fine. Fall is coming and it’s the time to play video games. The great Madden comes out and especially nice this year is the fact that Sony Playstation 3 comes out. Unfortunately the stock price of GME is really attached to the sales of the PS3. I don’t think it will be ready for Christmas and I feel that an announcement of a delay will be coming soon. Even if the unit comes out exactly as planned, I look at who else sells the unit. Everyone. Wal-Mart, Best Buy, Amazon.com. Why would I go to Gamestop where they are going to force me to buy 23 controllers, 10 games, and a bumper sticker as part of the packages they always put together. Prices will all be the same, that’s not the issue. The issue is they hardly ever just sell the unit. And then there are the game prices . Always more expensive than anyone else. They just can’t compete. Customer service is helpful but most of the purchasers don’t need help. They’ve done so much research they know more about most of the games that the employees do. All this is going to lead to a steady decline to a point they become a small part of the industry. They may even move to the state of one of my former employers, Babbages. Ask Toy’s are Us how things are going and you’ll get a glimpse of the future of Gamestop. It is not going to happen overnight but slowly sales will slip. Christmas as always will be good but a bit less good than expected. I am a short on the stock. Half after any rise and then half once the PS3 is confirmed or delayed. Good luck and hopefully I’ll make enough to buy a PS3…….at Best Buy.

By