A long-standing brick-and-mortar game shop could be the latest victim of the digital age - and it could leave gamers out in the cold. We've seen the pattern before: the demise of a beloved retail chain due to the rise of online shopping, and the decline of in-store retail sales. Now it's happening to the country's biggest retail gaming chain, GameStop.
foxnews.com/tech/gamestops-future-in-question-after-failing-to-secure-buyout
The full statement from the company is available at GameStop Concludes Process to Pursue Sale of Company.
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GameStop's future is grim as its stock price crumbles
GameStop is falling, and many analysts and industry observers are skeptical it can recover. The retailer reported earnings yesterday for Q1 of its fiscal 2020 yesterday where it missed its revenue target. Now, the company's stock price has crumbled to $5, which is the lowest this has been since 2013.
For Q1, GameStop generated $1.55 billion in revenues. That was significantly short of Wall Street's expected $1.64 billion. The company did cut costs to improve its earnings per share, but that's not something it can do every quarter. And GameStop's outlook is dire in part because its core business — selling hardware and used games — is starting to dry up.
Used game revenues dropped 20% year-over-year last quarter. And hardware revenues dropped 35 percent in the same comparison. And while the company has diversified into collectibles with its ThinkGeek brand, that growth wasn't enough to offset other declines.
[...] "Pre-owned revenues declined 20% year-on-year in Q1 2019, driven by continued traffic headwinds from a tougher year-on-year software release slate," Baird analyst Colin Sebastian wrote in a note to investors. "While new hardware sales declined 35% year-on-year, as Switch growth was more than offset by declines in Xbox One and PlayStation 4 sales. Reflecting a console cycle now long in the tooth."
Services like Google Stadia won't help GameStop's situation.
See also: GameStop Slumps 40% to 16-Year Low as Gaming Passes It By
The video game sales slump is killing GameStop
GameStop Stock Is Plummeting. The Bonds Are Doing Fine.
GameStop Has Become the Poster Child for Retail Woes and Tech Disruption
Previously: GameStop's Future in Question after Failing to Secure Buyout
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet
GameStop shares rise, fall and rise again in roller-coaster day of trading:
GameStop shares spiked Wednesday, reaching $348 apiece, only to come crashing down to $172 each early in the afternoon, causing multiple halts in trading of the stock due to volatility. Stocks then moved back up and ended the day at $265[*], a 7% increase for the day.
The past two days were a buying frenzy for the video game retailer's stock since Monday, when it was $136. That surge coincided with a lift to the entire stock market after Saturday's passage of the COVID relief bill in the Senate, as well as with an announcement that the video game retailer is developing a new e-commerce strategy, with Chewy.com founder Ryan Cohen heading that effort.
Cohen, who made a large investment in GameStop last year, will lead a committee seeking to transform GameStop a "technology business," the company said in a press release Monday.
GameStop shares skyrocketed from less than $20 in early January to more than $480 at the end of January thanks to a massive push by traders on the Reddit forum r/WallStreetBets. The stock price has dropped dramatically since then.
Price quote on Yahoo!
Also at BBC
Previously:
The Complete Moron's Guide to GameStop's Stock Roller Coaster
Console Options Without Disc Drives Could be GameStop's Final Death Knell
Web Site thinkgeek.com Moving in with Parent Company GameStop
GameStop Heading Towards Possible Doom
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet
GameStop's Future in Question after Failing to Secure Buyout
(Score: 2) by stretch611 on Wednesday February 06 2019, @08:51AM (12 children)
Not any GameStop that I know of was beloved.
Now with 5 covid vaccine shots/boosters altering my DNA :P
(Score: 3, Interesting) by The Mighty Buzzard on Wednesday February 06 2019, @08:54AM (9 children)
I dunno about beloved but I'm quite fond of them. I've no burning need to get a game the day - or even the year - it comes out, so they save me quite a bit of money.
My rights don't end where your fear begins.
(Score: 2) by nobu_the_bard on Wednesday February 06 2019, @01:27PM (2 children)
Yeah this.
I'll be sorry to see them go. They're the only game store chain left. Wal-Mart and its kin do not compare.
There has been a sort of revival in my region of mom-n-pop game stores thankfully.
(Score: 2) by Freeman on Wednesday February 06 2019, @05:27PM
I would chock that up to GameStop's prices.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 0) by Anonymous Coward on Wednesday February 06 2019, @08:15PM
"They're the only game store chain left."
Well, if Gamestop didn't bankrupt or buy out every other major game store chain we wouldn't have this situation.
For my part the only reason I'll be sad to see them go is because now it means I'll pretty much have to buy the games I like from amazon since I go for niche titles that walmart and other major franchises generally don't stock. There's like 1 other small regional store in town but that place overcharges and has games as an afterthought these days.
(Score: 3, Informative) by Freeman on Wednesday February 06 2019, @05:25PM (4 children)
While this was somewhat true a while ago, specifically for Console games. I have to question whether that is true, today. With how huge e-bay and amazon are, it wouldn't be surprising, if Gamestop's pricing on used games is more expensive by comparison. Sad fact, Half-Price Books is a better source of PC games than GameStop has been for the past 10+ years. Also, there tends to be a modest selection of used console games, consoles, and even e-book readers at most Half-Price Books locations. Though, what really killed Consoles for me was the cheap cost of PC games from Steam and no need for local 2 player co-op. Humble Bundle and GOG have been stupendously awesome at giving me good prices on games as well. Cool fact, Humble Bundle occasionally has bundles focusing on certain consoles. I've seen PS3, PS4, and Nintendo console games featured in bundles.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 2) by bobthecimmerian on Wednesday February 06 2019, @06:02PM (3 children)
For newer consoles I find the digital downloads are a killer feature. I hate juggling disks. What GameSpot should have negotiated, if they could, was some kind of detail with Sony and Microsoft and maybe even Steam and EA and so forth to put games onto USB flash drives with an embedded code. You buy a 16, 32, or 64 GB USB flash drive from GameSpot for 10-20% less than the game costs on the Playstation or Xbox or Steam digital store. You install the game from the flash drive on your console or PC, and the setup uses the one-time only activation code. Then you're free to wipe the flash drive and use it for your own purposes. People would still shop at GameStop because of the lower price, without having to juggle disks after they install the game.
I'm fond of Gog and Humble Bundle too.
(Score: 4, Insightful) by The Mighty Buzzard on Wednesday February 06 2019, @07:59PM (2 children)
I prefer disks. They have much higher read speed than my Internet connection can pull down. They also work just fine when it's raining and the cable's being wonky again since I don't play online games. And when you get tired of them you can wag them to GameStop or a pawn shop and let someone else enjoy them at a discount.
My rights don't end where your fear begins.
(Score: 2) by bobthecimmerian on Thursday February 07 2019, @04:41PM (1 child)
Most of the games my kids play are networked, so if our internet connection is down having a disk doesn't help. The disks have a higher read speed than internet, but I only have to download the game once. After that there's no effort.
Being able to resell your games, or buy used, is wonderful and I do miss that from back when we had a PS2.
(Score: 2) by The Mighty Buzzard on Thursday February 07 2019, @04:57PM
Ahh, see we don't even buy games that require Gold. Initially because The Roomie's kids were too young to be dealing with jackasses on the Internet and going forward because only one of us even wants to; in which case he can shell out the cash since nobody else is interested.
I still resell and buy used with XBox One disks. The local pawn shop sells every one they get in for $10 a pop and they have games barely a year old.
My rights don't end where your fear begins.
(Score: 0) by Anonymous Coward on Wednesday February 06 2019, @06:03PM
Look around for private game shops, I've noticed quite a few popping up even in some smaller towns around my own area.
(Score: 0) by Anonymous Coward on Wednesday February 06 2019, @01:20PM (1 child)
Based on FauxNews credibility, I'm inclined to believe to shop chain may actually be doing fine.
(Score: 4, Interesting) by The Mighty Buzzard on Wednesday February 06 2019, @03:30PM
They're predictably incredible, same as CNN or RT. If you want the straight dope on Putin, I'd avoid RT. For truth on anyone/anything running counter to far left policies, avoid CNN. For truth on anything running counter to establishment Republican agendas, avoid FNC. Otherwise you have passable odds at getting the truth from any of the above, though RT will put more actual work into it than either of the others.
My rights don't end where your fear begins.
(Score: 5, Insightful) by acid andy on Wednesday February 06 2019, @11:49AM (6 children)
I almost completely gave up buying games on physical media when they started shipping with DRM that needed online registration. If you can't play it without it phoning home to some server that will undoubtedly get shut down at some future date, what's the benefit of owning a physical copy? Think I'll stick to GOG.
If a cat has kittens, does a rat have rittens, a bat bittens and a mat mittens?
(Score: 2) by VLM on Wednesday February 06 2019, @01:07PM (5 children)
I was at a GS last weekend; my son is into console gaming (multi-player with friends etc)
GS gave up on PC, thats steam only now. Merely a vestigial amount of PC gaming stuff if any. A couple sq feet at most.
Much like Barnes and Noble used to be 99% books and now is down to less than 50% books and is mostly a gift store, the gamestop is mostly full of "gamer culture gifts" there must be more tee shirts than xboxone games at the store by us. And bobble heads and dolls aka "action figures" and decorative clutter etc. You can buy that crap cheaper on amazon of course with a better selection. Its actually not true that gamestop is a game store, its a gamer culture store mostly tee shirts and collectibles that also stocks games. Its about as much a game store as Target, given that Target stocks more watering cans and thermoses and womens swimwear than they stock video games.
They do have an excellent selection of cheap / old games that you COULD buy from the online store at full list release price. xbox one spyro reignited (essentially spyro remade and upsampled for the xbone) was like $10 used, $30 at Target new, or freak'n $39.99 at the microsoft store.
The cabal of console mfgrs hate retail because they want to be the single source forever selling Spyro at $40, they lose $30 when kids shop at gamestop or $10 when kids shop at Target. The main way they sabotage is by punishing the gamers. If you buy minecraft online, you click on the icon and play minecraft. If you're a bad boy and buy physical media, you click on the icon and search the living room for 5 minutes trying to find and insert your original minecraft disk and the game is slower because it'll look at the inserted disk occasionally.
Note that gamestop for recent new releases (Ace Combat 7 for my PS4 ?) is same list price as online stores.
The experience at GS is awful. Online I click "add to cart" and "checkout" and I'm all good and it makes me smile. At Target they can really do the logistics thing well, and my main complaint is waiting in line which really isn't all that bad. At GS they have ten big screens with morons babbling on them at high volume plus or minus bad music (the kind I always mute when playing games) and they try to pimp all kinds of reward clubs and tracking systems and protection plans every time I try to buy stuff and the stores are packed floor to ceiling like a crazed hoarder-store. Its cheaper for used games so people put up with it, but seriously, fuck GS.
So taken together the ONLY secret sauce gamestop provides as a business is last years games on crappy experience legacy optical media, are cheaper. Also its kinda a gift store / retail reward experience for teenage boys. Thats all. Can't really run a business on just that.
(Score: 3, Interesting) by EvilSS on Wednesday February 06 2019, @03:58PM (1 child)
To be fair, Microsoft tried to change this, tying the physical copy to a serial number on the disc so it wouldn't require the disc to play, but still allowing it to be resold later through specific retailers like GS who could revoke the key and reissue it. Gamers had a fit and Microsoft canned it, going back to the put-the-disc-in-to-play model for physical media.
(Score: 0) by Anonymous Coward on Wednesday February 06 2019, @08:20PM
To be fair, Microsoft tried to destroy the secondhand market. That's why people had a hissy fit. It was a shitty idea that the majority disliked along with the other crap they pulled on the xbone's launch which is why they lost close to half their preorders after announcing it and have been playing second fiddle ever since.
(Score: 2) by Freeman on Wednesday February 06 2019, @05:39PM (1 child)
FYI, PC games at GameStop have been that way for 10+ years. At least, anywhere I've been. That would include one I visited on a semi-regular basis in a very large metropolitan area. Kids like going to game stores and they have used games at decent prices. Sure, it's all well and good to wait 3 to 7 days for your game to arrive, if you buy it online. But, a kid isn't going to want to wait that long. It also isn't the same, if you're just buying a digital copy online. There's none of the personal touch that is involved with going to a store and browsing the shelves.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"
(Score: 3, Insightful) by VLM on Monday February 11 2019, @01:06PM
Sorry for the late response; anyway to elaborate on agreeing with your assessment, the delay doesn't fit in with "kid economics" you can't celebrate a good report card with a new game and pizza for dinner if it takes the game a week to arrive (or download...)
Likewise Auntie buys the kids gift cards to pick out what they want; they want to celebrate the day after their birthday, the day after their birthday, not a week later.
(Score: 2) by bob_super on Wednesday February 06 2019, @06:35PM
They are trying to survive when they can't compete with digital downloads. That's what the higher-margin "culture" crap is for.
I personally still prefer to buy the Switch games with a physical cartridge. Works better as a gift, and I can actually lend them to others to try in a few minutes even offline (did that when my sister got her kids a Switch for Xmas).
(Score: 3, Interesting) by Phoenix666 on Wednesday February 06 2019, @04:11PM (1 child)
I used to drop by GS on a regular basis to browse the bargain bin. I don't need to play games when they first come out or the fancy packaging they come in; it's a much more engaging and cost effective entertainment option than any video, movie, or show. I picked up the original Mass Effect trilogy that way; it cost under $25 for what was months of fun.
Over the last year or so, the cheaper buys vanished. GS only stocked games costing $20-30 or more. The last half dozen times I went in I wound up buying nothing at all. It's funny, because I'm pretty sure the margin for them on used games was huge. I'm aware there are online alternatives, but I did like to casually drop in and browse when I was out running errands or other things.
Now, as a knock-on effect, I have even less reason to shop retail for anything at a mall or other shopping complex. Oh well, GS, try to charge too much or mess with your customers, and they will move on.
Washington DC delenda est.
(Score: 2) by Freeman on Wednesday February 06 2019, @05:41PM
This makes a lot more sense for why they are struggling and why I've seen a recent independent game store come up in my (fairly small, rural) area.
Joshua 1:9 "Be strong and of a good courage; be not afraid, neither be thou dismayed: for the Lord thy God is with thee"