GameStop Downsizes, Over 300 Stores to Permanently Close

[btarunr]

GameStop announced that it will permanently close down over 300 brick-and-mortar stores in an effort to "de-diversity" its business. The company closed down 331 stores last year, bringing the store strength down to 5,500 locations. Much of GameStop's focus markets are those parts of the U.S. with sub-optimal Internet bandwidth that blunts the advantage digital retailers like Steam have over it. Besides game hard-copies and coupons for cash, GameStop also retails game consoles and accessories. The earnings call that included this announcement also had a comment about a possible delay in the release of PlayStation 5 and Xbox Series X as supply-chains around the world are severely disrupted, not to mention people's disposable incomes.



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[Frick]

But I thought they were essential.

 

[notb]

How is this even possible, that they manage to run 5000 stores in US?

That said, market for games in US is enormous. ~$36B in 2018 on games (including subscriptions etc).
But assuming there are 50 mln active gamers (who own a console or a gaming graphics card), that's $720/person... Sick

 

[newtekie1]

How is this even possible, that they manage to run 5000 stores in US?

That said, market for games in US is enormous. ~$36B in 2018 on games (including subscriptions etc).
But assuming there are 50 mln active gamers (who own a console or a gaming graphics card), that's $720/person... Sick

$720/person isn't really that much. That's $60 a month on games, so basically one new game a month. I know people that buy something game related every single time they get paid.

 

[Nater]

Didn't Sony screw over GameStop not too long ago, in regards to not allowing them to sell PSN gamecards?

I would have pulled all of Sony's shit from the shelves in protest. And THEN went bankrupt.

 

[notb]

$720/person isn't really that much. That's $60 a month on games, so basically one new game a month. I know people that buy something game related every single time they get paid.

Well exactly, that's one new game a month. On average!
I may have been buying games so often when I was 12. Nowadays I buy 2-3 games a year (probably like most gamers in their 30s).

You know... I have absolutely nothing against people gaming for few hours a day. I've been there. And if someone can afford spending $200+ per month on games, nothing wrong with that either.
But the way I see this, there just aren't that many good games...

Also, I though that nowadays most avid gamers don't play multiple single-player titles, but focus on a handful (...single...) multi-player game.

I'd love to see some Steam sales statistics.

 

[bonehead123]

Much of GameStop's focus markets are those parts of the U.S. with sub-optimal Internet bandwidth

So in other words, they are just taking advantage of those who live in underserved/rural/urban areas and can least afford to pay their outrageous prices and crappy piss-ant customer service....

PS... if you have ever had the unfortunate displeasure to visit one of their stores, you will probably agree with the following:

DIE Gamestop, DIE ......​

 

[lexluthermiester]

I predict a restructure happening soon.

 

[Megabyte9000]

Smart move.. Checking out soon before things get worse and hurt their bottom line. What most CEO's have done few weeks back.

 

[moproblems99]

But the way I see this, there just aren't that many good games...

We don't agree on a lot but this is one of them. Most games have been meh but there have definitely been a few gems.

 

[dozenfury]

Never good to hear since this will undoubtedly affect a lot of Gamestop employees, and from what I've heard a lot of them have already been going above and beyond to try to save their stores.

But Gamestop got way, way, oversaturated with stores. I live in a metro area with around 300k population within 20 miles, so decent size but definitely not a major city. And at one point there were 7 Gamestops in town. Not kidding. A couple of them closed but I think we still have 5. And that's not taking into account local Best Buys, Targets, WalMarts, and a regional videogame store chain with 2 local stores. Gamestop can survive, but we don't need one every 2 miles like Subway.

 

[Darmok N Jalad]

Didn't Sony screw over GameStop not too long ago, in regards to not allowing them to sell PSN gamecards?

I would have pulled all of Sony's shit from the shelves in protest. And THEN went bankrupt.

Wasn’t it GameStop that was pulling promotional items out of new packaging because it threatened their business model?

 

[moob]

Well exactly, that's one new game a month. On average!
I may have been buying games so often when I was 12. Nowadays I buy 2-3 games a year (probably like most gamers in their 30s).

You know... I have absolutely nothing against people gaming for few hours a day. I've been there. And if someone can afford spending $200+ per month on games, nothing wrong with that either.
But the way I see this, there just aren't that many good games...

Also, I though that nowadays most avid gamers don't play multiple single-player titles, but focus on a handful (...single...) multi-player game.

I'd love to see some Steam sales statistics.

Don't take this the wrong way but you sound like an old politician who still thinks gamers are all 15 year old boys. The average gamer is in their 30's as we're the ones who grew up gaming in the 80's, 90's, 00's and kept up with the hobby (quick aside, it bothers the hell out of me that the ESA doesn't know the different generations (Gen X is 1965-1980, Millennials are 1981-1996, Gen Z are 1997-2012). Anecdotally, most of the gamers I know are in the 30's/40's and for the most part we all mostly play quality single-player games and there may be 1 or 2 multiplayer games that groups may get together to play. As we get older, there's way more of a focus on single-player titles with strong narratives. And contrary to what you said, there are many great games that fit that criteria.

 

[notb]

Don't take this the wrong way but you sound like an old politician who still thinks gamers are all 15 year old boys.

Absolutely not. But I assume older people just don't have time for it. You disagree?

Anecdotally, most of the gamers I know are in the 30's/40's and for the most part we all mostly play quality single-player games and there may be 1 or 2 multiplayer games that groups may get together to play. As we get older, there's way more of a focus on single-player titles with strong narratives. And contrary to what you said, there are many great games that fit that criteria.

Nothing unusual about it.
First of all: I bet you're in roughly that age, so it's not surprising that most of the gamers you know are in that age.
Second: PC gaming was a big thing in the 90s and that group keeps playing.

Teenagers today just don't play games like we used to 20 years ago. They're more into smartphone gaming, Fortnite, LoL and things like that.
If Baldur's Gate or Civilization launched today, they would become niche and forgotten games. It just isn't interesting to kids AD 2020.

 

[Xzibit]

But I thought they were essential.

a day later

Police visit a GameStop in Athens, Georgia to order the store to shut down and comply with shelter-in-place rules.

 

[newtekie1]

Absolutely not. But I assume older people just don't have time for it. You disagree?

Yes, I very much disagree. Adults still have free time, and my generation, that grew up gaming, still game in their free time as entertainment. Older generations golfed, or went to baseball games, or went to the movies, etc. Younger generations play games, even if they are in their 30s and 40s now. And we also tend to have more disposable income too.

 

[Ravenas]

GameStop is of gaming as Blockbuster is of movies.

 

[lexluthermiester]

GameStop is of gaming as Blockbuster is of movies.

Not quite. However, your perspective is understandable.

 

[Ravenas]

Not quite. However, your perspective is understandable.

Their revenue is slowly fading due to digital subscriptions and purchases. As technology advances, games will move to the cloud via streaming and distribution. Physical copies of games really won't make sense. Further, games are simply becoming too large for physical media.

Physical copies of music have essentially collapsed to a 5-10% market share. Movies are following suit.

I don't think there is any reading between lines.

 

[lexluthermiester]

Their revenue is slowly fading due to digital subscriptions and purchases.

True, but there is still a demand for physical media that is unlikely to completely fade away. Then there is systems and accessories, not everyone wants to buy them online or from wally world.

 

[R-T-B]

True, but there is still a demand for physical media that is unlikely to completely fade away. Then there is systems and accessories, not everyone wants to buy them online or from wally world.

There is, but that demand can't sustain a chain.

Case in point: There is still one blockbuster open in Bend, Oregon. It's a fully functional blockbuster, and is run mostly for then novelty value, but they do rentals too. There is just that much demand, but no more.

Oregon Blockbuster outlasts others to become last on Earth

BEND, Ore. (AP) — There are challenges that come with running the last Blockbuster Video on the planet.

apnews.com

 

[Ravenas]

They were literally a sub $400 million publicly traded company prior to them being forced to close the doors due to COVID-19. They were so cash strapped they couldn't afford to go private. The writing was on the wall, and the investors and board knew it. This is just the beginning. Chapter 11 will come at some point, probably mid to late April. There will be an attempt to garner stimulus money.

 

[lexluthermiester]

There is, but that demand can't sustain a chain.

Sure it can. It has and likely will continue to. They will need to restructure and strategically downsize.

 

[R-T-B]

Sure it can. It has and likely will continue to. They will need to restructure and strategically downsize.

I'm not sure I agree. As the above poster, I see this going the way of blockbuster. One-store operations only.

 

[TechLurker]

I have a long history with Gamestop, when they were still Electronics Boutique (then EB Games, then Gamestop). The managers at the two mall locations I visited regularly used to know me as a regular who'd go there, read up some strategy guides and gaming mags, and eventually walk out with at least one game. Both still remain in business, and both of them still have a manager or worker who've I've become friendly enough with to get some early deals or info.

That said and in a way, the brand and the handling at many of their other stores have really gone downhill from those days. The way they handled trade-ins and resale have gotten considerably worse, and the way they treat their employees is complete and utter shit.

As far as their business goes, I expect they will still remain in business for the foreseeable future. The main thing stopping them from dying outright is the fact that many parts of the US still have real crappy internet speeds, or have capped internet limits, both of which prohibit streaming, decent online play, and downloading games. Also, there is the fact that they've steadily shifted toward catering to the anime and comic crowds, which is the last real niche left in the US. At this point, they should just merge with their sister company ThinkGeek and consolidate all stores towards general "nerd-dom"; games, comics, anime, cosplay, etc. since they haven't been entirely about games in a long time.