Unity CEO sees more gaming consolidation, firms like GameStop can survive in thriving industry
Jun. 14, 2021 1:02 PM ETUnity Software Inc. (U)MSFT, GME, UBy: Brian Stewart, SA News Editor3 Comments
- Unity Software (NYSE:U) CEO John Riccitiello suggested Monday that the push into streaming in the gaming industry could spur continued consolidation. He also predicted continued strong growth for the industry, opening the door for retailers like GameStop (NYSE:GME) to develop a winning business model.
- Speaking to CNBC, Riccitiello compared the current situation in gaming to what movies and TV went through when Netflix launched its streaming service.
- However, in this gaming case, the market has "skipped the first 10 years" with Netflix as the only player streaming at scale, Riccitiello noted. Rather, he pointed out that many large competitors are already able to bring content to streaming.
- Still, the Unity CEO doubted how many players could emerge as winners in the streaming space. Given the expense of subscriptions, he argued that consumers couldn't sustain a large number of providers.
- Even given these potential challenges, Riccitiello was bullish on the gaming space in general. He noted that that industry continues to post growth rates above 20% per year, far outstripping other media, like TV or music.
- The Unity CEO argued that this gives a lot of room to support different business models.
- Asked specifically about GameStop's ability to survive in a marketplace that is aggressively moving online, Riccitiello said "survival isn't the question," given the strong economics of the gaming space.
- Instead, Riccitiello saw the door open for continued consolidation, as exemplified by Microsoft's (NASDAQ:MSFT) purchase of Bethesda.
- Earlier in the day, data from NPD Group showed that video game sales climbed 3% in May, even with a difficult comparison to the previous year. May 2020 sales had been up more than 50% compared to 2019.
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onkd
19 Jun. 2021
Every Gamestop I stumble on is completely empty with no customers and their buildings are outdated in lackluster locations. Ticking. Time. Bomb.
T
THBG17
14 Jun. 2021
“The market cap for alt-coins is half a trillion, and nobody panics: it’s all a part of the plan...But GME breaks 20 billion market cap and everyone loses their mind!”