Hello,
GameStop is in a precarious position. Once the one-stop shop for all things gaming, the retailer has fallen on hard times. Since 2016, its value has fallen by about 90%.
I’d still reckon that it has a special place in many gamers’ hearts though, from the 90s to 2010 it was one of the only places to buy video games.
In order for this retail behemoth to survive it’s going to need to change, fast.
What was peak GameStop like?
From about 2000 to 2012 GameStop was at the top of the pack for gamers to go to. The media ecosystem around games wasn’t as fleshed out so the way a lot of people learned about games was from the store or Game Informer, the magazine they partner with. People had to trust GameStop employees to be the gatekeepers of games.
GameStop also had a robust used game portfolio that allowed users to get some value for games that they had already completed. I will caveat this by saying they weren’t giving much for the games that users returned, but it was better than nothing.
What led to its downfall?
The iceberg that caused this retailer’s ship to start sinking was console publishers digitizing their products. The advent of better wifi and online games changed the purchase journey for gamers. Before this digitization, all video game controllers, software, and hardware flowed through GameStop.
After this digitization, it was easier for players to download things directly to their console as opposed to going to a store to pick up games. In addition to that, e-commerce sites like eBay, and Amazon also started to encroach on GameStop’s turf by offering more convenient, affordable options for video games.
GameStop also has a knack for being on the wrong side of PR scandals. Most recently they gained a lot of flack for trying to declare themselves as an essential business when the COVID lockdowns started.
How are they adapting?
From what I’ve seen, they are focusing on their e-commerce capabilities, positioning themselves as a place for relatives to go to get presents for their gamer family members, and expanding their product portfolio to focus on more than just video games.
While e-commerce capabilities are nice, I wonder how much headway they’ll make investing in that. The retail giant never going to catch up to Amazon. Plus, the video game publishers now sell a large number of games directly on their consoles, bypassing the need for a middleman entirely.
Positioning themselves as the place for nongamers to learn about games is smart. It can be very difficult to surprise a gamer with a game they like if the person buying the present has no prior experience with video games.
Selling more than video games is interesting, but I wonder if it will really help affect their bottom line. Selling video game themed toys and trading cards is great, but I don’t think it’ll get new customers into their stores.
What could they be doing?
GameStop’s biggest advantage is that they are the only physical video game store. They have over 1,800 spaces around the world dedicated just to video games. That’s a helluva differentiator that they should be leaning into more. They have started to try out some new store concepts that have a bigger space for customers to play games in Oklahoma, but they need to scale fast.
Gaming has exploded, but there aren’t many physical spaces beyond living rooms and basements to enjoy it with people. GameStop should seek partnerships with local influencers, competitive gamers, and developers to bring communities together. They should focus more on the unique experience that a specialized gaming venue can provide because right now that venue doesn’t exist.
What to take away:
GameStop has fallen from glory, but they’re not dead yet. In this increasingly digital world, GameStop needs to lean into the brick and mortar stores they own in order to differentiate themselves. They can show the world what a specialized gaming space should be.
Gaming news that caught my eye:
Polygon: An interesting article about how Twitch isn’t doing enough to make Trans streamers visible. Their reasoning is that if they tagged these streamers more specifically then it would be easier for them to be harassed.
The Verge: There are no new Marvel movies on the horizon, but the production company has still found a way to take over the headlines. Fortnite’s newest season will be about Marvel characters.
Kotaku: The new Call of Duty marketing campaign is under scrutiny after editing out footage from the Tiananmen Square Massacre, and promoting far-right conspiracy theories.
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