GameStop's problems continue: 120 staff laid off, stock crashing

[midian182]

What just happened? It appears that things are going from bad to worse for GameStop. The retail chain has just announced it is laying off 140 employees, which represents a 14 percent cut of workers at its corporate headquarters and other offices, including the Game Informer magazine subsidiary.

“As part of the previously announced GameStop Reboot initiative to transform our business for the future and improve our financial performance, we can confirm a workforce reduction was implemented,” said a GameStop spokesperson.

“While these changes are difficult, they were necessary to reduce costs and better align the organization with our efforts to optimize the business to meet our future objectives and success factors. We recognize that this is a difficult day for our company and particularly for those associates impacted. We appreciate their dedication and service to GameStop and are committed to supporting them during this time of transition.”

GameStop’s Reboot plan, outlined by CEO George Sherman, consists of addressing selling, general and administrative expenses, optimizing the current business, and developing new revenue streams.

Seven members of Game Informer’s 19 full-time staff tweeted that they have been laid off. “I am trying to get things right with my people,” editor-in-chief Andy McNamara wrote on Twitter. “I love Game Informer, its people and its readers more than any corporation could, and I will address all the issues when I can, but for now I need to focus on my GI family.”

Back in June 2018, GameStop began exploring options for a buyout, but it announced earlier this year that it had failed to secure a buyer. In June, it was reported that falling console sales had forced the company into cost-cutting measures, while July brought news it would be piloting new in-store concepts to try and stay afloat.

With an increasing number of gamers opting for digital downloads over buying the physical version of titles, retail stores are suffering. GameStop reported record losses for 2018, and its stock is down 17 percent compared to last month and 93 percent from its peak in 2013. With many tech giants now focusing on game streaming, the threat of these outlets going the way of Blockbuster is a very real one.

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https://www.techspot.com/news/81540-gamestop-problems-continue-120-staff-laid-off-stock.html

 

[AIC1Drew]

I think this is a perfect opportunity for them to look to be absorbed by someone. Givin Gamestop's relative small size, they could be assimilated into the electronics section of a major retail chain.

 

[psycros]

I think this is a perfect opportunity for them to look to be absorbed by someone. Givin Gamestop's relative small size, they could be assimilated into the electronics section of a major retail chain.

I'd previously suggested they team up with a chain of arcades and try to capitalize on nostalgia since their surviving on used game exchange anyway. Even that would be a longshot, though - I can't think of a single time such a pairing has worked out for the target of the acquisition and that includes Geek Squad. People aren't really interested in stores within stores. The former CEO of J.C. Penny's nearly killed the company by pushing that confusing and unwelcome shopping paradigm. No, what Gamestop needs to be in the first world is extinct and I say this as someone whose childhood predates the Internet. They've made no attempt to compete with anyone, not even other used gaming stores, and that's really the only thing they've got left. Redbox has devastated them as well..why pay $60 for a console game that you're going to burn through in a weekend when you can rent? The only place GS would have any chance of survival would be the developing world where Internet connectivity can be very problematic.

 

[Nero7]

Absolutely deserved, the managment is an utter failure and the store has failed to capitalize on the advantages that a physical appearance has over a digital store.

 

[kira setsu]

I think this is a perfect opportunity for them to look to be absorbed by someone. Givin Gamestop's relative small size, they could be assimilated into the electronics section of a major retail chain.

this is a good idea, but only if that bigger chain keeps the trade-ins and used games while also dropping the constant nagging about them.

let target or bestbuy take the reins, I dont really hate gamestop like most gamers, maybe because I never get rid of old games but I would be sad if this is the end for them, when a gaming generation is closed theyre a great place to find those old games you missed out on for cheap.

 

[zorven]

"Will it go the way of Blockbuster?"

Yes. More and more games will be downloaded or streamed. I can't remember the last time I purchased a physical game (maybe because I primarily play on PC)

 

[Gypsygib]

They should have opened a digital gamespot/Steam competitor years ago.

 

[zorven]

They should have opened a digital gamespot/Steam competitor years ago.

They did...

https://www.shacknews.com/article/67981/gamestop-buys-impulse-spawn-labs

 

[texasrattler]

GameStop failed to do the one thing that all companies need to do. Stay relivant. Sears had the same issue. Wouldnt price match, didnt change to a digital option until years later, by then it was all to late. Buying Kmart didnt help.
GS is over. People will n do choose GameFly over GameStop. Imo GS died many yrs ago.

 

[ManuelV]

Absolutely deserved, the managment is an utter failure and the store has failed to capitalize on the advantages that a physical appearance has over a digital store.

Advantages which you can't charge customers for.

 

[etempest]

They should have opened a digital gamespot/Steam competitor years ago.

They tried, they bought Stardock's Impulse Launcher from them.
https://en.wikipedia.org/wiki/Impulse_(software

 

[Uncle Al]

Sadly, they have waited for simply too long and their value to ANY other company, retailer, etc. no longer exists. Frankly, I don't think they could even be absorbed by Walmart and survive more than a year.

 

[Danny101]

The used games market is a low profit margin busness. It depends on a high volume of exchanges. Gamestop got greedy with their Cadillac used prices. They failed to grasp the concept of 'perpetually used' in the sense that you charge low prices to encourage frequent exchanges and traffic. Who wants to pay $20 for some obscure game you don't know anything about? At $5, I might bite and take the risk and probably many others. You can even make money off of bad games by curiosity alone. It's basically rent for as long as you want to play it. The less exchanged games will likely have more value since they are liked so much. You might can charge $10 for those. Gamers will often cite certain games as their favorite, but what they're really citing are their favorite experiences. My favorite game is most often the 'next one'. I've had my experience, so I'm trading this one in for a new one. Downloadable Only games will only shrink the overall market and reduce opportunities for small businesses and jobs. Not anything I would encourage the gaming industry to pursue. I want GameStop and the like to survive.

 

[ziffel66]

"Will it go the way of Blockbuster?"

Fingers crossed.