Gamestop can cost $0. Buy this warehouse instead. | Colorful fool
GameStop is disappearing fast, but the trend that’s killing it also has a clear winner. Here’s where to put your money.
Remember the skyrocketing supply of memes in 2021? God, how time flies.
It’s been nearly five years since social media posts sparked short shrugs GameStop (GME 2.04%) and AMC Entertainment Holdings (AMC 2.20%) shares. From the closing bell on January 20, 2021 to the close on January 27, 2021 (just one week later), AMC stock rose 570%, while GameStop soared 788%.
But the joy didn’t last long. AMC shares are down 98% from that peak, and GameStop has lost 73% as of December 17, 2025. The average analyst recommendation for GameStop is Underperform, with a price target of 41% below current levels. Keep those expected price drops up for a few more years and there won’t be much left.
I hate to say it, but GameStop is starting to look dated. When was the last time you bought a video game at your local store instead of downloading it to your favorite console? GameStop’s stock may very well go to zero in the long run.
Image source: Getty Images.
Amazon eats GameStop’s lunch
On the other hand, I can recommend one of GameStop’s top competitors for new money in 2026. The same shift in the digital industry that is destroying GameStop also has big winners. Especially, Amazon (AMZN +2.46%) is benefiting from the game download trend in several ways.
- Amazon Luna: The e-commerce giant has its own cloud gaming service – no discs, no downloads, just launch the games on Amazon’s servers and stream the experience to your favorite web browser or mobile device.
- Prime Gaming: Amazon Prime subscribers have free access to many Luna games and in-game items.
- Digital game sales: Amazon sells download codes for Sony PlayStation, Microsoft Xbox, Nintendo Switch and PC games. You get the same product as GameStop, without the need for retail. It’s true that every gaming platform also offers direct downloads, but Amazon helps you organize your game purchases on many types of devices.
- AWS gaming infrastructure: Amazon Web Services (AWS) powers online multiplayer, game streaming, and patch/update delivery for many major publishers. This way Amazon profits whether you play on PlayStation, Xbox or PC.
- Twitch: Amazon owns the dominant gaming video streaming platform. Twitch also integrates with Prime Gaming for cross-promotion.
- E-commerce for hardware: And Amazon is happy to serve you if you’re looking for consoles, controllers, or accessories (the physical stuff that brick-and-mortar GameStop stores rely on).
The gameplay is just a bonus; Amazon is a great buy anyway
And here’s the best part. With or without the gaming industry, Amazon stock is a fantastic buy right now.
Amazon’s annualized sales growth has averaged 11.5% over the past three years, with a 13% year-over-year increase in the last two reports. The company generated $10.6 billion in free cash flow over the past year, on top of a massive $691 billion in top-line sales. and $120 billion in capital spending. Those artificial intelligence (AI) data centers aren’t just being created as you know.
This trillion-dollar tech titan is earning its market capitalization the honest way, with excellent financial results and strong growth prospects. Sorry GameStop, but Amazon is the first place I would start looking for a purchase related to the video game industry.
Anders Bylund has positions in Amazon. The Motley Fool has positions and recommends Amazon and Microsoft. The Motley Fool recommends Nintendo and recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.