GameStop lays off staff, CFO as it focuses on crypto and NFTs

[midian182]

What just happened? GameStop is making layoffs across the company and has fired its Chief Financial Operator, Mike Recupero, as the video game retailer focuses on "digital asset and web3 gaming verticals." The move comes in the middle of a crypto winter that has seen the price of digital currencies and non-fungible tokens plummet.

An internal memo from GameStop CEO Matt Furlong that was leaked on Reddit reads: "Change will be a constant as we evolve our commerce business and launch new products through our blockchain group."

The last few years have seen consoles going the way of the PC as physical games fall behind their digitally downloadable alternatives. Ars Technica reports that there were 226 new games available on discs or cartridges last year, compared to almost 2,200 digital titles. The rising popularity of game subscription services and streaming is also impacting physical sales.

Credit: Ars Technica

The changing landscape led to GameStop getting into the world of crypto and NFTs earlier this year, launching a digital wallet for both assets in May. Despite crypto prices crashing recently, Furlong believes GameStop is on the right path. "These changes will enable us to operate in a profitable manner as we execute against our strategy of pursuing sales growth in our commerce business and launching new products that empower customers within the digital asset and web3 gaming verticals," he wrote.

Furlong added that GameStop had invested heavily in personnel (over 600 corporate hires), technology, inventory, and supply chain infrastructure over the past 18 months. "This means eliminating excess costs and operating with an intense owner's mentality. Everyone in the organization must become even more hands-on and embrace a heightened level of accountability for results."

One Reddit post claims that around 20% of staff are being let go, most of which come from hires made within the last six months. It adds that nobody from the NFT team has been fired.

The layoffs include employees of online magazine Game Informer, which GameStop acquired in 2000.

GameStop's financial results from the previous quarter showed sales increasing very slightly, but net losses doubled to more than $158 million.

GameStop hit the headlines in 2021 after its share price jumped 680%, thanks to the GameStonk phenomenon. It saw Redditors buy heavily shorted stocks in the company, forcing hedge funds and investors to buy back stock to mitigate their losses.

Bloomberg reports that shares were down 5% in extended trading following news of the layoffs.

h/t: PC Gamer

Permalink to story.

https://www.techspot.com/news/95225-gamestop-lays-off-staff-cfo-focuses-crypto-nfts.html

 

[JKnight]

Next years' news will be GameStop declares bankruptcy.

 

[Neatfeatguy]

I don't see how they could be banking on the idea that NFTs are a good business model to follow.....perhaps they know or can think of something that doesn't come to mind for me.

I just see NFTs as a joke and I fear it'll be part of the downfall for gamestop's direction.

As for physical copies, I do miss them (for the PC, I haven't been a console gamer for many years). When PC physical copies were still a thing I used to travel to local GameStop stores (there are easily half a dozen GameStop stores within a 20 minute drive, any direction from my house) near my house about once a month and I'd dig through their PC game section. I'd generally walk out of each location with at least 1 game that's priced under $10 and generally one or two other games priced a bit higher - in all, about every month I'd end up with 6-8 new PC games I've added to my collection. I used to have hundreds of physical copies of PC games and GameStop was a big part of helping me build the collection.

Since things shifted to digital, I don't really give a rip about buying any kind of PC game. I do purchase copies of games on GoG, but only when they're highly discounted. I miss the physical aspect of games - the little knickknacks that come with them, the game manuals, artwork, backgrounds/prequel stories and so on. You don't get those things with digital copies unless you buy some overpriced "collector's edition" that gives you jpeg artwork or soundtracks.....I wouldn't pay for that digital crap.

I wish physical copies would make a come back, but realistically, I don't see it happening.

 

[RudyBob]

" The rising popularity of game subscription services and streaming is also impacting physical sales" I don't believe that. It should read "The forcing of digital sales on the consumer is working"

 

[MaXtor]

GameStop board member Larry Cheng tweeted in May:

"A down market tests whether the CFO is a leader. If the CFO is more of a back-office administrator playing a support role, companies can falter during these times. If the CFO is a culture-driving, agenda-setting leader, it can be a huge asset to companies in down markets."

https://twitter.com/i/web/status/1524471636329594880

This is nothing new, since Ryan Cohen joined the board, GameStop has been radically cutting fat while hiring new talent for over a year. None of the dismissals have been from the blockchain team.

https://twitter.com/i/web/status/1465518039055622148

Here is a list of over 400 tech hires discovered via LinkedIn since February 2021:
https://onedrive.live.com/View.aspx?resid=D645EE2EDB0B6!2167&authkey=!AMFLvwFiMuIKSHI

 

[Uncle Al]

Never was a fan of theirs but you got to admit ... they are still hanging on when just about all others have fallen by the wayside .....

 

[gabelogan1324]

GameStop board member Larry Cheng tweeted in May:

"A down market tests whether the CFO is a leader. If the CFO is more of a back-office administrator playing a support role, companies can falter during these times. If the CFO is a culture-driving, agenda-setting leader, it can be a huge asset to companies in down markets."

https://twitter.com/i/web/status/1524471636329594880

This is nothing new, since Ryan Cohen joined the board, GameStop has been radically cutting fat while hiring new talent for over a year. None of the dismissals have been from the blockchain team.

https://twitter.com/i/web/status/1465518039055622148

Here is a list of over 400 tech hires discovered via LinkedIn since February 2021:
https://onedrive.live.com/View.aspx?resid=D645EE2EDB0B6!2167&authkey=!AMFLvwFiMuIKSHI

wow that is a lot of dedication to get a list like that! kudos to whoever did it!

 

[defaultluser]

So they swapped out one seasonally variable market (games) for another that crashes even harder (Crypto plus NFC?)

It's no wonder GameStop's share price has been about as volatile n as Bitcoin over the last few months

I'm sory Reddit trolls, your crypto God on High can't pull another Chewy off again (and you should just give up messing with the share price.) You need o not be burdened by so many retail store if you want to switch to online-only

 

[Theinsanegamer]

" The rising popularity of game subscription services and streaming is also impacting physical sales" I don't believe that. It should read "The forcing of digital sales on the consumer is working"

Nothing forced, majority of consumer sprefer digital downloads for convenience. Same reason they prefer shopping online.

It's not perfect, but I'll take steam over dealing with greasy gamestop stores anyday

 

[MaXtor]

Nothing forced, majority of consumer sprefer digital downloads for convenience. Same reason they prefer shopping online.

It's not perfect, but I'll take steam over dealing with greasy gamestop stores anyday

I'd argue that you're both right. I remember when Steam launched and everyone hated that your games were locked into an account. Now the majority of people prefer Steam for its convenience. Login to your Steam account from any computer and you can download and play your games.

What people aren't seeing is that the tech behind NFTs is the next evolution. People will always hate change in the beginning but will eventually fall for the convenience factor. You will be able to resell your games (and movies) and in game purchases digitally over the blockchain.

Our introduction to NFTs have been trash JPEGs that have values that make little if any sense. And trading NFTs in general has a learning curve that's not ready for mainstream. NFTs will become mainstream once they're implemented in products and services which you don't even realize.

Now, I don't know if GameStop's NFT marketplace will come out on top. However, they are taking the right steps, and we know they'll have games and even TV series on their marketplace (as they've teased on Twitter).

https://twitter.com/i/web/status/1545083263915638784

So with their total revamping of the company and focusing on transitioning to a tech company, I think GameStop is a good bet for a long term investment. As long as you can stomach the price swings and media hit pieces that every current major player went through (Amazon, Google, Apple, etc).

We'll see in the coming years. The company is also still shorted to oblivion, so there's potential for another squeeze, but I wouldn't invest based on that.

 

[RudyBob]

Nothing forced, majority of consumer sprefer digital downloads for convenience. Same reason they prefer shopping online.

It's not perfect, but I'll take steam over dealing with greasy gamestop stores anyday

I disagree. Shopping online gives a wealth of comparison shopping for a single product which is then delivered as a real item, such as a grill. You want a game you pretty much have one choice. I would rather have five/ten dvd's for a game then have to download it. The optical drive has pretty much disappeared and that is by collusion IMO. I maybe wrong and I can live with that

 

[defaultluser]

I'd argue that you're both right. I remember when Steam launched and everyone hated that your games were locked into an account. Now the majority of people prefer Steam for its convenience. Login to your Steam account from any computer and you can download and play your games.

What people aren't seeing is that the tech behind NFTs is the next evolution. People will always hate change in the beginning but will eventually fall for the convenience factor. You will be able to resell your games (and movies) and in game purchases digitally over the blockchain.

Our introduction to NFTs have been trash JPEGs that have values that make little if any sense. And trading NFTs in general has a learning curve that's not ready for mainstream. NFTs will become mainstream once they're implemented in products and services which you don't even realize.

Now, I don't know if GameStop's NFT marketplace will come out on top. However, they are taking the right steps, and we know they'll have games and even TV series on their marketplace (as they've teased on Twitter).

https://twitter.com/i/web/status/1545083263915638784

So with their total revamping of the company and focusing on transitioning to a tech company, I think GameStop is a good bet for a long term investment. As long as you can stomach the price swings and media hit pieces that every current major player went through (Amazon, Google, Apple, etc).

We'll see in the coming years. The company is also still shorted to oblivion, so there's potential for another squeeze, but I wouldn't invest based on that.

Its a lot harder to seamlessly transition into nft when you have over 3000 locations bleeding money.

The pure online companies have none of that overhead, like Open Sea. tel us again how Gamestp is somehow going to be instrumental in finding The New Path (TM) that all other cryptos will follow?

 

[alexnode]

NFT = bankruptcy ... all *****ic failing enterpraneurs I know are into the game.

 

[MaXtor]

Its a lot harder to seamlessly transition into nft when you have over 3000 locations bleeding money.

The pure online companies have none of that overhead, like Open Sea. tel us again how Gamestp is somehow going to be instrumental in finding The New Path (TM) that all other cryptos will follow?

In the last year GameStop has/is:

Raised $1.677B to fund their tech transformation.

Paid off all of their debt.

Made over 600 tech hires.

Built a dream team of Amazon and Chewy executives plus blockchain/NFT specialists.

Replaced the entire board of old boomer directors.

Launched a DEX crypto wallet in May, rated 5 stars with 4000 reviews (MetaMask is rated 3 stars with 2500 reviews).

Launching an NFT marketplace with Loopring to offer 1/100 fee L2 transactions this month.

Offering $100M grant program with Immutable X to build NFTs and web3 gaming.


On the retail side, their store locations are rentals, so they've been able to strategically and easily close poor performing stores without being stuck with real estate.

Hired 6000 employees for their new 700,000 sqft and 530,000 sqft fulfillment centers, as well as a new dedicated call center.


And to top it off, GameStop has an absolute cult following since the January 2021 gamma squeeze that was cut short when Robinhood took away the buy button. Millions of people have continued buying and holding the stock regardless of hit pieces by the media for over a year and a half. That in itself is absolutely bullish.

 

[defaultluser]

In the last year GameStop has/is:

Raised $1.677B to fund their tech transformation.

Paid off all of their debt.

Made over 600 tech hires.

Built a dream team of Amazon and Chewy executives plus blockchain/NFT specialists.

Replaced the entire board of old boomer directors.

Launched a DEX crypto wallet in May, rated 5 stars with 4000 reviews (MetaMask is rated 3 stars with 2500 reviews).

Launching an NFT marketplace with Loopring to offer 1/100 fee L2 transactions this month.

Offering $100M grant program with Immutable X to build NFTs and web3 gaming.


On the retail side, their store locations are rentals, so they've been able to strategically and easily close poor performing stores without being stuck with real estate.

Hired 6000 employees for their new 700,000 sqft and 530,000 sqft fulfillment centers, as well as a new dedicated call center.


And to top it off, GameStop has an absolute cult following since the January 2021 gamma squeeze that was cut short when Robinhood took away the buy button. Millions of people have continued buying and holding the stock regardless of hit pieces by the media for over a year and a half. That in itself is absolutely bullish.

Its easy to pay-off debt overnight via stock releases when your stock continues ti climb to mess with short sellers. (same trick Lisa Su used when the AMD stock was rising because traders were betting on Zen, and climbing before it's release.)

That doesn't mean that the owner has any idea how to fix this company that hasn't been solvent in over a decade ( Su had already inherited the fab-lite version of AMD, so all she had to do was recreate a success story from their past - Athlon 64, while GameStop still has yet to figure out a plan to divest itself of al those fabs!

GameStop still hasn't proven then viability of this web3 **** either (so, Id expect at least two decades before we see any positive results ,which is a long time t wait on an investment.)

 

[MaXtor]

Id expect at least two decades before we see any positive results ,which is a long time t wait on an investment.

It depends on why you're investing. I invest for my retirement. While I seriously doubt it will take 20 years, I'm fine if it does.

$100k invested into Amazon 20 years ago would be over $10M today.
$100k invested into Apple 20 years ago would be over $30M today.

I see GameStop's transformation as more of a start-up tech company. But they have a serious leg up on most other start-ups. They've built an all star team, they have no debt, they have cash in the bank, and they're already a household name with a relentless cult following.

Any investment is a risk. You have to do as much due diligence as you can and decide for yourself if that risk is worth taking.

GameStop execs (including Ryan Cohen) bought themselves more shares in the company a couple of months ago while GameStop was trading above $100 (which most analysts think is way overvalued). To me that speaks volumes, they're confident that the company will be worth much more.

 

[Steve Lalancette]

Since this digital crap was forced on us, I started piracy.
Yes, I buy Nintendo and GOG games... But only because I can own them.
Anything that requires an internet connection = piracy.
It's the only ethical thing to do.