GameStop received another round of love from Wedbush Securities. Honestly, I’m not sure why Michael Pachter is so in love with the flailing retailer as it’s become increasingly difficult in this environment to find incrementally positive information on GameStop to sustain a bullish argument. But then again, Michael has been watching this name like hawk, and makes some other observations about this company that others may have been ignoring. Here’s the latest commentary on GameStop from Wedbush:Notwithstanding our optimism about GameStop’s ability to grow, the “melting ice cube” inherent in its core games business is likely to keep the company’s share price at a low multiple. We think GameStop is a quality retailer, has a shareholder friendly capital allocation strategy, and has prudently managed the transition from a games-only retailer to a multi-channel retailer of games, mobile hardware and services and collectibles. We expect GameStop’s core business to continue to contract, and expect its mobile and loot businesses to continue to grow; over the next few quarters, we should be in a position to accurately model growth of the mobile business, and if we see that business having room for continued growth, we are prepared to revisit our price target. Maintain OUTPERFORM but lower our PT to $36 from $38. Wedbush lowered its price target on GameStop, and it’s not as if they have a choice. The results were below expectations, but commentary pertaining to growing categories is keeping Wedbush on board for the ride. And while these new growth categories are digital in nature, sustaining enough sales per square footage to maintain break-even will become more difficult as we progress through the later parts of the current game console cycle. GameStop will need to demonstrate better rationalization of its store foot print soon to sustain positive operating margins. The current business model is broken, and a path to sustaining revenue growth seems unlikely over the mid-term. Maybe over the long-run GME’s strategy will become a better fit for shareholders, but the current weakness across software and hardware is making it difficult for anyone to get really aggressive here. At this point many on the buy side are discounting growth assumptions more aggressively, and the drop-off in hardware sales by the third or fourth year of a console release isn’t an exaggeration. GameStop sounds way over optimistic on its hardware forecast, and until there’s enough data to suggest otherwise it’s far more practical to bet against the franchise.