GameStop just can’t seem to catch a break. The video game retail giant announced that it will be closing 180-200 “underperforming” stores around globally before the end of the fiscal year.
The news came from the company’s Q2 earnings call, during which CFO James Bell praised the profitable 95% of their 5700 stores worldwide. The other five percent of stores, however, aren’t doing too hot. “While that is an impressive statistic,” said Bell on the earnings call, “we have a clear opportunity to improve our overall profitability by de-densifying our chain.”
These store closures are only the first in a long-term plan to “Reboot” GameStop. GameStop is in a bad spot right now. Their stock price hit a historic low earlier this year, both their hardware and software sales are down, and most notably, they recently laid off a number of corporate employees and over half of Game Informer’s editorial staff. With digital media skyrocketing in popularity and physical purchasers electing to take their business to other, more convenient locations like Amazon, GameStop has tried numerous things, like incorporating ThinkGeek merchandise into a majority of their locations. None of these ideas have turned out well for the company, and this recent “Reboot” initiative is just another in a long line of ideas to make this company profitable once more.
Bell doesn’t expect GameStop’s sales numbers to improve in the near future, either, although he blames this on the end of the current console generation rather than other issues. That, paired with console manufacturers confirming the existence and launch window of next-generation consoles earlier than usual, is the reason why he believes. GameStop’s sales are so low at the moment. “We anticipate that this will lead to much lighter title slate through the rest of 2019 and early 2020 given the end of the cycle timing for current consoles.” Bell also blames the lack of a huge, blockbuster game release in 2019 for the decline in sales, citing Rockstar’s Red Dead Redemption 2 as 2018’s number one volume title and pointing out that there is not a comparable launch for this year.
GameStop plans to close more stores over the next few years, and there are reports of certain GameStop locations investing in retro games and esports in an attempt to drive sales. Only time will tell if GameStop can manage to recover from the changing times, and in a few years, we’ll really know if the reason behind all this was just the end of a console generation, or if it was something greater.