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Is it Game Over for GameStop?

Pedestrians pass in front of a GameStop store in New York
Scott Mlyn | CNBC
Pedestrians pass in front of a GameStop store in New York

It seems that the retail gaming industry just got hit with another big challenge. On Monday, Sony officially announced its new game streaming service, PlayStation Now, which could be a GameStop killer. Not only is Sony trying to steal customers away from retailers, but the company is taking aim at the heart of GameStop's business, its trade-in policy.

With PlayStation Now, Sony is trying to make it easier than ever to purchase and rent games right at home, and the size of the service's digital library of games is growing larger every day. Sony CEO Shawn Layden said Tuesday on Power Lunch that PlayStation Now has, "125 games that we can stream immediately, and about 300 games you can rent." By creating a solely digital marketplace, Sony is not only attempting to drive a stake through the heart of GameStop, but it's also seeking to gut the trade-in market, which has been a thorn in the side of publishers and console makers for years.

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These digital marketplaces may not have a devastating immediate effect on GameStop, however the stock did drop slightly following Sony's announcement, and the company is a notorious target for short selling. Many have been betting on the company to fail for a while, however, it has yet to do so. The stock is up nearly 12 percent over the past year, and they remain one of the few places where consumers can purchase and sell used games. But could PlayStation Now finally prove the shorts right? It could.

Sony has been making some interesting strides recently with cloud gaming in order to grab more of the gamer market. For example, Sony allows customers to purchase their games digitally months before the release date and pre-install it so that the game will be immediately available when that day arrives. In an age obsessed with streaming and instant gratification, this is could be a big win for Sony. While retailers might not be in any immediate danger from Sony's new services, the evolution towards digital marketplaces and cloud streaming has clearly been set into motion, and it seems this trend will only grow stronger with time.