Will GameStop play better online?
If you trace video game retailer GameStop’s history back to its earliest days as Babbage’s, you’ll see that the company has been selling physical video games since the days of 5 ¼” floppy discs. One of the chain’s major shareholders, however, is strongly suggesting that the retailer move its focus away from its brick-and-mortar presence.
GameStop shareholder Ryan Cohen, who is also a co-founder of Chewy, has strongly encouraged the retailer to focus on digital sales, according to Reuters. In a statement to regulators, Mr. Cohen discussed the chain’s need to become a company that “delights gamers and delivers exceptional digital experiences” rather than “[overprioritizing] its brick-and-mortar footprint and [stumbling] around in the online ecosystem.”
The video game industry has shifted increasingly away from physical media-based games towards downloadable ones thanks to big advancements in consumer internet connection speed, bandwidth and cloud computing.
GameStop has shown recent signs of changing how it does business to profit in the digital realm. In October, the chain inked a deal with Microsoft, giving the retailer a cut of the price of any transaction, such as a digital download or a subscription, made through a console that GameStop sells, according to an article on The Motley Fool.
Before this year, GameStop made numerous attempts to find its footing in a world with fewer people purchasing cartridges or discs for their consoles.
In the mid-2010s, GameStop acquired online retailer ThinkGeek to focus on branded collectibles (known as “loot”), and launched a standalone brick-and-mortar retailer under the banner. In 2019, GameStop began consolidating ThinkGeek into its main brand, according to The Verge.
Also in 2019, GameStop began piloting a few redesigned store concepts. Some of the new stores were geared towards allowing visitors to try out new games and engage in e-sports competitions. Others were geared specifically toward classic gaming consoles and retro gaming.
Earlier this year GameStop fell out of the public’s good graces by attempting to keep its stores open during the first wave of pandemic lockdowns. The retailer soon doubled back on the policy.
- GameStop investor Ryan Cohen urges strategic review – Reuters
- GameStop’s Deal With Microsoft Gives It a Cut of Every Digital Game Sale – The Motley Fool
- Once e-tail only, ThinkGeek expands brick-and-mortar presence – RetailWire
- ThinkGeek.com is shutting down and that’s a damn shame – The Verge
- Can GameStop become the go-to place for the gaming lifestyle – RetailWire
- Will GameStop lose more than it wins keeping stores open during the coronavirus outbreak? – RetailWire
DISCUSSION QUESTIONS: How important are physical stores to a brand like GameStop? Do you see GameStop being more successful if it focuses on selling online and focusing on digital game downloads?