Cramer's 'Mad Money' Recap: Get In the GameStop
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The average video-game player last year was 33 years old, and gamers under 18 made up less than a third of all players, Jim Cramer said on his "Mad Money" show Thursday. That means the video-game market is much bigger than people think, he said.
Cramer said Mark Penn's book, Microtrends: The Small Forces Behind Tomorrow's Big Changes, has "a gold mine of ideas" that can be used for investment purposes.Cramer noted Penn's chapter on "video game grown-ups" and said the way to play that trend is to invest in GameStop (GME)."
Video-game makers are holding back the release of certain games until next year even though the holiday season is usually the time to release these games because manufacturers don't want them to get lost in the mix, he said. This older demographic also means that gamers are willing to pay more for games, which is good for GameStop, he said. While he believes the game makers themselves are "too inconsistent" to buy as a stock, a retailer of video games like GameStop is a pure play on this trend. Moreover, while GameStop is not an international play yet, it's poised to grow, he said. Beyond that, Cramer said he likes its used-game business, where margins are up 50%.
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