Calling GameStop sacred ground in the title of this article is not an oversell of the beloved gaming retailer. For years GameStop had been the go-to spot to get all your gaming needs and to meet people who shared our joint passion for gaming and everything nerdy.
However, father time and the growing popularity of digital media has been a red ring of death for GameStop and its revenue with big drops in stock shares, stock price and having 65% of its market value reduced in the last 3 years alone. It may be safe to say GameStop is losing the race to try to keep up with gaming’s changes over the past few years but before I play grim reaper in this tale I shall bring you back to gaming past and explain how GameStop has gotten here.
Gaming like it’s 1999
Remember 1999? I don’t much because I was 5 years old at the time. 1999 gave us many things such as the start of MySpace, The Phantom Menace coming to the big screen and nearly killing a whole movie franchise, and many major companies fearing Y2K because they were clearly morons. However, 1999 also gave us the launch of GameStop who opened 30 stores across America under the ownership of Babbage’s etc while also launching GameStop.com to allow gamers to purchase games online. Not long after Barnes & Noble Booksellers purchased Babbage’s etc due to the principal owner of Babbage’s Leonard Riggio also being the chairman and principal shareholder of Barnes & Noble Booksellers also.
In 2002 GameStop was taken public and placed on the stock market with Barnes and Noble Booksellers still owning majority shares until 2004 when GameStop had become its very own company. Over the next few years GameStop would buy out many companies around the world such as EB games, Rhino Video Games, Free Record shop’s and Micromania to name a few and using all those companies stores in North America and Europe to make GameStop become worldwide and turn it into the massive juggernaut it was and still is to a degree today.
Now, so far this has been a very upbeat and fun run down gaming memory lane but as I said before there is a reason for this article and I am afraid this is where it all, unfortunately, heads downhill for our beloved GameStop. As mentioned before GameStop as a whole have been struggling to deal with digital content for many years now but even more so when the PS4 and Xbox One dropped in 2013.
GameStop has and probably always will be a company that depends on selling physical copies of games and we all know that owning physical copies of games is a dying art it is sad but true and based on their last quarter sales in 2018, physical copies of games counted for just over half of their overall income which is not a good sign for them in the long run. The CEO situation at GameStop is another big warning sign having had 5 CEO’s in the space of a single year one of which left the post after only 3 months in charge, That doesn’t scream healthy and thriving business to me. Also mentioned before is that 65% of their market value has just vanished over the last 3 years while still trying to keep their near 5,800 stores open in 14 different countries all over the world.
Even with all these problems, there are 2 main problems that scream the end is near for GameStop. Firstly, GameStop is a mouth-watering $470 million in debt and this is the companies main problem. Any company with that kinda debt and loss in sales is not gonna be able to get back to being where they were just by selling a few extra copies of Anthem or Kingdom Hearts III, this debt will make it almost impossible for GameStop to find any investors or people to take over to save the company which brings me to problem number 2.
GameStop tried to sell themselves and failed last year in 2018 which says a lot when you can’t even give your company away. Private equity investors whose jobs are basically to buy and strip down companies for parts will not touch GameStop due to its crippling debt and whoever takes over GameStop will also take over that $470 million debt also. Christmas 2018 was also not a great period for the company as GameStop’s holiday sales were down 5%, it doesn’t seem much but having your sales be down at the time of year where stores do their most business is never a good sign.
GameStop has tried to pull revenues from other sources by acquiring ThinkGeek in 2015 for $140 million to try to sell more than just games but this has made GameStop look more like a toy store than a video game store. Worse still even though the products are very cool it has still not been enough to save the store from the nose dive they are currently in.
Where do we go now?
It sucks to see a part of my childhood and most peoples childhood whither on the vine. This institution as I said was and still is to some sacred ground in the world of gaming even though trade in prices have always been a joke. With the company looking into its future with doubt and uncertainty, who knows what will happen. All I know is that I still go to my local and everyone should because who knows how long they have before the reaper comes.