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
Ironically, I had looked at their pre-owned PS4 games, and all their pre-owned games and systems. The problem was they had several pre-owned games priced higher than the new games. Their used PS4 price was even still higher than the price of a new one. They don't seem to have their crap together. They used to thrive on pre-owned, and made a good profit at it too, but once they price something pre-owned, that's the price it says at it seems, and they aren't moving any product that way. Plus, places like Disc Replay(which has its own struggles) are really eating into their pre-owned profits.
The best deal I got was picking up Quantum Break Collector’s Edition Box (with goodies) for $29.99 while it still sold full price on Steam
Edit: Ease of use is the same, and happiness is debatable. Although, what we have now sure is entertaining (Looking at you Epic).
Back in 2004 I worked @ Electronics Boutique as A Assistant manager, had been their since 2000 or so. One day we had the DM, RM and A few other higher ups coming by our store. ( Our store was A big deal , always in the top 4 ). Anyhow, they were talking to us and ask what we thought the future was for EB / games ect ect. I said something along the line of ... I think it will be all online. ( was really the only PC guy in the store, everyone else were console peasants ). The DM kind of got mad and the RM ask me why ... I was telling him about steam ect ect. They all started taking about how people like to shop and hold stuff in their hands. And people loved boxes and owning A real item. And that they would always have the consols ... I said well the xbox is more like A PC ... anyhow .. they all thought I was A fool.. And I am sure my DM diskliked me after that .. she was very rude from then on.
But to this day ... I wonder if they remember me telling them this was going to happen ... I know the RM was demoted to DM and then fired when Gamestop took over ... but man I really want to know if they are thinking .. man that dumb kid was right ...
edit
Well the were all 40 - 50 .. so they might be dead by now ... ugh I am 39 .. where the hell did time go !
What happens to Gamestop is like a complete deja-vu of many retailers over here lately. They try, keep trying, revamp their store concept and try once more, when in fact everybody knows what time it is. Its a misguided holding on to the old and unable to jump onto the new. Because new is risky and unknown.
A much better path for these retailers is to reboot to 100% online and rebuild a store concept from there. This is how many other brands get their way back into the physical store while being profitable. It doesn't provide them sales, but serves mostly for visibility and to showcase and try out products, provide face-to-face customer service for those who need it, be approachable. And I think that is fine, and it is the new normal. There is still a demand for physical stores, but only because we like to go there not because we're forced to because its not available online.
There are industries out there where there is simply an unimaginable small chance that anyone would be able to compete, take IC manufacturing, how likely it is for anyone to start competing effectively with someone like TSMC at this point ? Same thing with the current situation of digital distribution of games.
I fail to see the problems here...
Completely agree its a hard marketplace at this point to get into though. You need some seriously big guns at this point, and Gamestop was unlikely to have them. They had their chance though years ago, but missed it completely.
I really like all the UE4 stuff being built into the launcher.
Edit: Just realized you said developers and not EGS
Anyway, this further underlines why a store such as GameStop never had any clue how they are going digital. They have no USP and as a webshop only they fight a horde of keysellers at lowest price.