GameStop's Silent Store Closures Spark Concern
The video game retailer GameStop is quietly closing numerous US stores, leaving customers and employees surprised and disheartened. This trend reflects GameStop's ongoing decline, with its physical footprint shrinking by nearly one-third. Social media platforms are buzzing with customer and employee reports of closures, painting a worrying picture for the company's future.
GameStop, once the world's largest physical retailer of new and used video games, boasts a 44-year history, originating as Babbage's in 1980. Reaching its peak in 2015 with over 6,000 global locations and $9 billion in annual sales, the company has faced significant challenges in recent years. The shift to digital game sales has significantly impacted its performance. By February 2024, ScrapeHero data indicated a nearly 33% reduction in physical stores, leaving approximately 3,000 locations in the US.
Following a December 2024 SEC filing hinting at further store closures, both customers and employees have taken to platforms like Twitter and Reddit to share news of closed locations. One Twitter user expressed disappointment over the closure of a seemingly successful store, fearing this foreshadows closures of less profitable locations. Employee accounts also reveal concerns, with one Canadian employee citing "unrealistic targets" as management assesses store viability.
GameStop's Ongoing Struggle
The recent closures continue a downward trend for GameStop. A March 2024 Reuters report predicted a gloomy outlook, highlighting the closure of 287 stores in the preceding year. This followed a fourth-quarter 2023 revenue drop of approximately $432 million (nearly 20%).
Over the past few years, various strategies have been attempted to revitalize GameStop. Responding to the shift to online game purchases, the company has explored diversification, including expanding into video game merchandise, phone trade-ins, and trading card grading. The 2021 intervention by Reddit's amateur investors, documented in Netflix's "Eat the Rich: The GameStop Saga" and the film "Dumb Money," provided a temporary reprieve. However, the ongoing store closures suggest the company continues to face significant headwinds.
