GameStop CEO Takes Swipe at DEI, 'Wokeness' as Company Prepares To Sell Canadian, French Assets
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GameStop CEO Ryan Cohen made waves when he took the helm as chief executive officer of the video game and nerd merch retailer in 2023, moving from a board member and investor into the C-suite.
More recently, however, Cohen has made headlines for a controversial tweet detailing GameStop's plan to sell more than 500 stores and associated assets, as PC Gamer outlined.
"Email M&A@gamestop.com if you’re interested in buying GameStop Canada or Micromania France. High taxes, Liberalism, Socialism, Progressivism, Wokeness and DEI included at no additional cost if you buy today!" Cohen wrote in a Feb. 18 post shared to X.
Whether the factors mentioned in Cohen's tweet were material to the notion of selling off company assets in Canada and France — or whether the sale is strictly based on more concrete economic or business-related metrics — the tweet certainly drew a great deal of attention, attracting over 836,000 views, 10,000 likes, and nearly 2,000 replies. Cohen's X presence is often overtly political.
According to an SEC filing made in February 2024, at that time GameStop operated 203 stores in Canada and 314 in France. A company press release covering the planned asset sale was extremely concise, delivered in only a single sentence.
"GameStop Corp. (NYSE: GME) ('GameStop' or the 'Company') today announced that as part of its evaluation of its international assets, the Company intends to pursue a sale of its operations in France and Canada," the press release stated.
GameStop Facing Significant Store Closures in Lengthy Turnaround Effort
According to PC Gamer, GameStop has long been in the process of trimming its store count. In 2019, it shuttered about 200 stores as part of a cost-cutting measure, and it exited Austria, Ireland, and Switzerland in 2023. The company further began closing its locations in Germany in 2024, with that process remaining ongoing. Per Game Rant, GameStop is also closing stores across the U.S., with many store closures leaving customers surprised and potentially irritated.
Zacks' analysis of GameStop's most recent earnings (Q3 2024) illustrated a company still struggling with slumping sales. GameStop reported sales of $860.3 million, notably down 20.2% from year-prior sales of $1.08 billion. Hardware and accessory sales tumbled by 28%, while software sales dipped by 15.4%. Even the collectibles category couldn't buck the trend, ticking downward by 3.7%.
On the other hand, as CBC reported, GameStop earned $17.4 million that quarter, as opposed to posting a significant loss as it had in Q3 2023.
Zacks termed the stock a hold, noting that it had outperformed expectations over the course of the past few months. On the contrary, Wedbush analyst Michael Pachter — as cited by Fortune in December — was decidedly less optimistic.
Pachter said that GameStop shares "trade at a level that ignores the company’s many challenges ahead" and that "the company’s planned return to growth faces insurmountable barriers."
GameStop May Follow in Blockbuster's Footsteps, Sooner or Later
With many outlets having offered conjecture over the years as to GameStop's future — a 2021 Yahoo! Finance report termed the company a "past-its-prime mall retailer" — comparisons to Blockbuster Video often enter the conversation.
For one, both companies suffered the indignity of being tied to an obsolete business model. In GameStop's case, the attempted pivot away from physical media software sales into the kitsch and collectibles market has delivered only middling results. Competition is fierce in this market, from mom-and-pop stores to retail giants such as Walmart and Amazon, and digital software delivery is becoming the industry standard.
The rate of decline in US physical video game software spending accelerated in 2024. Spending on physical video game software in the US has been cut in more than half since 2021 and is now more than 85% below its 2008 peak. We'll see if Switch 2 can help slow/reverse this trend in 2025.
— Mat Piscatella (@matpiscatella.bsky.social) January 24, 2025 at 3:54 PM
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According to My Nintendo News, spending on physical games has halved since 2021 alone and is down more than 85% since its peak in 2008. This represents an extremely difficult position for GameStop, as physical game sales are at the core of its business model — particularly regarding its trade-in program and used games segment. Further, many game developers regard GameStop as a middleman that can be removed from the equation through direct sales to consumers via their own portals (Origin, Epic, etc.) or even via third-party portals, such as Steam. A digital game costs nearly nothing to distribute, and manufacturing and shipping costs associated with physical media sales are no longer a consideration under the emerging model. Boutique sales for limited-run products are likely to persist, however.
With physical games going the way of the dodo in the near future (as Ars Technica pointed out, the PS5 Pro's lack of a physical disc drive gestures toward the end of an era) and the secondary market filled with other major players, GameStop's attempted turnaround faces some extreme headwinds.