Wednesday, April 3rd 2019
GameStop Records Worst Losses in Its History, Hinting at a Digital Future
or maybe that headline should read "Digital Present", because in many ways, it certainly seems we are already living in a heavily digital present. GameStop, one of the leading physical retailers for both new and used games, that usually has trade-in programs for games consoles as well, has reported a staggering $673 million loss in its 2018 performance.
All facets of GameStops' business have worsened: new hardware sales, new software sales, and pre-owned (which declined some 13.2% YoY) all lost money for the company, with no bright spot to be seen anywhere in the previously bright sheen of this particular part of the retail games and entertainment market. GameStop spoke of a "new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability", which justifies the company's positive outlook for 2019. How GameStop is optimistic about its future with these losses and a projected 5-10% lowered sales for the games market throughout 2019 is somewhat of a strange marriage of concepts, but if it works for the company, it works. Especially with the increased effort from a number of companies in bringing cloud gaming to fruition, with Google's Stadia and Microsoft's own expected push, it seems that a hugely important part of the market for the likes of GameStop (and let's mention other, digital storefronts as well) is going to be left dry without any sort of cut in game sales.
Source:
GameStop
All facets of GameStops' business have worsened: new hardware sales, new software sales, and pre-owned (which declined some 13.2% YoY) all lost money for the company, with no bright spot to be seen anywhere in the previously bright sheen of this particular part of the retail games and entertainment market. GameStop spoke of a "new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability", which justifies the company's positive outlook for 2019. How GameStop is optimistic about its future with these losses and a projected 5-10% lowered sales for the games market throughout 2019 is somewhat of a strange marriage of concepts, but if it works for the company, it works. Especially with the increased effort from a number of companies in bringing cloud gaming to fruition, with Google's Stadia and Microsoft's own expected push, it seems that a hugely important part of the market for the likes of GameStop (and let's mention other, digital storefronts as well) is going to be left dry without any sort of cut in game sales.
47 Comments on GameStop Records Worst Losses in Its History, Hinting at a Digital Future
GameStop is literally worthless...good riddance.
Even the little train that could knew it was over
It's a decision everyone knew was going to bite them in the ass.
If they could fix their systems, it wouldn't be such a bad place. It's kinda neat to have such a specialty gaming store where one can go in and not only buy games, but also look at marked down previously owned games, and other random related merchandise. I've even picked up a few interesting things myself from the pre-owned bin.
I stopped going in them once PC games started to really phase out physical copies (that was what.....6 years back now?). When PC was still only (or at least heavily) done through physical copies I was more than happy visiting 5-6 local Gamestops in my area (I'd do it in one day) or if I was out driving some place I didn't normally go and saw a new (to me) Gamestop store, I'd stop in and browse the PC games. I purchased many cheap PC games - ones that have been on the shelves for 6+ months and they wanted to clear inventory. I'd easily pick up half a dozen games in one weekend and not spend more than $30.
Once they started opening PC game boxes and removing everything from them (to prevent theft), I stopped buying games from them. I wanted a new game that was unopened. Not a "new" game they opened and pulled everything out. I still have games to this day that I haven't opened (not as many as I used to - probably a good 14-16 games still - because I told some off as I've thinned out my physical PC game collection) and I may never open. Too many games, not enough time to play them all!
You can't resell a digital copy of a game. It's linked to some kind of DRM gaming platform (Steam, Uplay, Playstation/Xbox account). The need for a place like Gamestop isn't really needed in this day and age.
Next year after the gamestop aquisition, they closed it for "mitigating their losses?"
Nah man that really doesn't add up to me. Especially considering they went back in the same market later with inferior branding...
I think there is a place for them to exist but a rather niche one at best.... I think the CEO should reach out to all the game publishers and strike up some sort of special distribution deal with collectors editions... Make gamestop a more specialized kind of store that focuses less on the regular consoles and accessory pieces and only have unique limited or collection edition items for sale.
I know and understand that my idea is kind of forcing them into a smaller pigeon hole than their current one. But my point being is they are tapping into a market that wallmart or bestbuy might not tap into.
publishers maybe need to hook up with gamestop more and pay them to market/promote their games more -- They probably do but maybe this needs refining?
I think that gamestop re-engineering themselves to be the one-stop-shop/outlet for collectors/limited editions will possibly open up more business for them though i could be wrong...
TL;DR - stop trying to serve the entire market as a jack of all trades and narrow down on maybe more niche but profitable part of the market?? they can still have a few stores that sell the regular gaming stuff here and there but maybe focus less on it.
Maybe im just talking out of my ass and rambling a bit too much.
Let's imagine that GameStop did keep Impulse's doors open today. The amount of money it could make is trivial because they still would have lost all of the revenue from Microsoft, Sony, and Nintendo going digital. GameStop would have been forced to shutter its brick and mortar stores because the demand simply isn't there. It was inevitable that GameStop would become a shadow of itself and there's really nothing it could do about it without legal intervention dictating that publishers (Valve, Microsoft, Sony, Steam, CD Projekt, Ubisoft, Electronic Arts, Blizzard, Epic Games, Apple, Google, etc.) can't run their own stores creating demand for an independent digital store like Impulse that doesn't exist otherwise.
Haaa well, things change.