When it comes to buying and selling video games, really only one business comes to mind. Many gamers have fond memories of standing in line waiting for the latest releases, or taking old games back to get a few dollars in credit toward their next purchase. Okay, maybe these aren’t really fond memories, but it appears as if the digital age is about to claim another victim.
GameStop has announced that they are set to close another 200 underperforming stores by the start of the year. Of course, they don’t want to bypass the busy holiday season, so expect for them to wait until early 2020 before closing down shop. Jim Bell, CFO of GameStop, told this news to investors during an earnings call earlier today.
We’re “on track to close between 180 and 200 underperforming stores globally by the end of this fiscal year,” he said during that call. It would appear as if physical game copies are becoming a thing of the past. More gamers are digitally downloading games directly to their computer or game system.
This news comes after the company has already closed 195 stores globally after slumping sales hit their bottom line. These additional 200 stores really show the shape the company as a whole. There’s absolutely no way for them to compete and they’re going out the same way Blockbuster did. Soon, there will barely be a few GameStop in a few select locations.
Slumping Sales
Sales for GameStop have already slid down 13.3% in the first quarter alone. They’ve also laid off hundreds of workers throughout the organization. They’ve even let go nearly 14% of all their corporate sales associates at their headquarters in Texas. And if you like their magazine Game Informer, then that is probably next in line to get axed. They’ve let go nearly half of the people they had working to publish that magazine.
All of these moves lay out the obvious for GameStop. They can’t keep up with digital downloads and can offer nothing to get their share of the market back. It won’t be too much longer before GameStop is yet another relic of a previous time when games were at their peak. But we may be wrong here. The gaming companies like Sony and Microsoft are expected to release their next-gen consoles in the next few years. Could the PS5 and latest XBox save GameStop?
Maybe for a time, but these consoles can be purchased online via Amazon and other department stores like Walmart. Without the regular game sales to go with the consoles, they will have no other way to make money.
