GameStop Closing 200 Stores By the End of 2019
GameStop has been a staple video game retailer since 1984. But all the nostalgia in the world won’t save GameStop. Or will it?
During their earnings call on Tuesday, September 10, GameStop announced they were would be shutting down between 180 and 200 stores. And that’s only the beginning. They plan to close hundreds more by Spring 2022. Fortune reported that the flailing games retailer has reduced its corporate staff by 14%.
At E3, GameStop Executive Vice President and Chief Customer Officer Frank Hamlin revealed their upcoming strategy: to focus on gaming culture and not necessarily the games itself. “We need to…focus on becoming a cultural center for gaming….If [E3] is the Vatican [of gaming], why aren’t we the local church?”
Once upon a time, GameStop was, in essence, like a local, cultural hub, with midnight games releases, giveways, and gamers just hanging out to talk games. But with game streaming services like Steam Store, Playstation announcing they will no longer allow retailers to sell game codes, and Xbox creating a disc-less console, and players being able to purchase physical copies of games cheaper on Amazon, GameStop is losing its relevancy.
While Hamlin maintains that streaming doesn’t necessarily mean GameStop’s demise, they have struggled for years to keep up with the changing gaming industry. Though their efforts seem too little too late, only time will tell if their strategy to reclaim the hearts of gamers will pay off.
They are banking on next gen consoles still having disc drives as well as ramping up their focus on accessories, toys, collectibles, comic books, retro gaming consoles, and gear from the recently acquired ThinkGeek, a geek culture retail store. And while there are still many consumers out there long for midnight game releases and will never truly abandon brick and mortar stores, the fact is, GameStop is fighting against a growing trend: more and more people are shopping online than in physical stores. And retailers are feeling the sting of less in-store sales on big money holidays like Black Friday. The research is there: consumers prefer shopping online for certain things, including video games. GameStop’s fight to remain seems like they’re trying to make “fetch” happen. Did they learn nothing from Blockbuster Video, Tower Records, and Sam Goody?
GameStop is the largest video game retailer in the world. But they’ve been on a steady decline since 2013. They’ve made a lot of no good, very bad business moves, like Spring Mobile. And let’s be honest: GameStop deals are barely competitive. But does that mean this new strategy under GameStop’s new CEO George Sherman won’t be the “Hail Mary” the dying retailer needs. Do you think their new strategy will be enough to save the empire? Or will GameStop go the way of other failed retail empires that couldn’t keep up with emerging technology and the changing needs and habits of consumers?
