GameStop's (GME) primary profit center, their buy-sell-trade program, remains at odds with the principal game publishers' moves to digital delivery. Activision (ATVI), Electronic Arts (EA) and Take-Two (TTWO) increasingly sell direct to consumers and embrace a piecemeal content model. Declines in GameStop's large, highest margin preowned category continue to accelerate (see charts below). Coupled with flattening growth in its smaller, lower margin adjacencies, the pre-owned declines will drive fiscal 2020 earnings negative.
Efforts to staunch the coming losses, such as this month's announcement of a partnership with