Examples of Damage Control in Gaming: Game? Stop
The question pertaining to Gamestop’s future plans for business has been asked by the press, the public, and the company’s executives for the last few years. The slow-but-steady move towards digital has done a number on their financials, one exacerbated when the mid-tier market at large lost its place on retail shelves for a multitude of reasons — so many that they deserve their own post. This digital movement won’t stop, though fortunately for them, it’s being hindered by greedy ISPs and the country’s poor bandwidth. Despite Gamestop taking steps to enter the market themselves, it hasn’t been enough to offset their dwindling profits.
This has actually become a little worse with the switch to new consoles. Financial analysts who expected new consoles to move software were right, but they didn’t expect software sales on last-generation consoles (PS3 and 360) to drop tremendously along with that. Software sales on new consoles haven’t been high enough to offset that drop.
They closed a number of stores over the last year to increase their profits, too, though it doesn’t seem to have amounted to much. There are too many Gamestop stores in America, many of which are very close to each other. When the company purchased competitors like Funco Land and Electronics Boutique, most of those stores were left open and repurposed. That meant a lot of malls and shopping centers had (and still have) two Gamestop stores competing with each other. It’s never a pleasure to see jobs lost (unless you’re a masochist), but their reasons for closing them was understandable.
But if that wasn’t enough, what can they do? They revealed their new plan this past week: in the near future, they plan to decrease their focus on video games and concentrate more on selling phones and tablets, in an initiative dubbed “Gamestop 3.0.” Some existing stores already do this, but Gamestop also plans on opening new stores dedicated to selling Apple and AT&T products. They won’t be selling those in the same store, though. No, they’ll be in separate stores, called “Spring Mobile” and “Simply Mac.” The executives explained to their analysts that this will only be the first initiative from the company to branch out from video games.
You could see this move coming a mile away, though it didn’t stop some people on the internet from decrying it. And here you thought most gamers hated their local Gamestops. Some offered rational criticisms about the move, but others just wanted to complain for the sake of it. We are on the internet, after all. Gamestops have been selling and buying back used phones and tablets for a few years now, so this transition was inevitable.
The big question here is whether it will be worthwhile for the company. Another electronics retailer that increased their focus on mobile offerings was RadioShack, who remain the butt of numerous jokes from anyone wondering how they’re still in business in 2014 — though they admittedly closed a significant (20%) amount of stores recently. America already has a number of retailers focused on selling mobile phones and plans for various carriers. With a crowded field like this, is there enough room for another competitor? Not to mention that “Simply Mac” is a store selling Apple products when they have plenty of their own stores around the country. The public will be unlikely to shop there instead of an Apple store, meaning they’ll have to strategically place stores in territories where Apple hasn’t yet…assuming they haven’t already taken the best locations.
Gamestop had to do something to ensure their long term future, lest they go in the same direction places like Sam Goody and Tower Records went when music went digital. But shifting that focus won’t be easy, and this may not be the way to go about it due to the amount of competition they have. Maybe they can sprinkle some of that RadioShack magic on them for good luck.
About The Author
Geoff
News Editor | Geoff is some nerd who writes for a blog and thinks he's knowledgeable. He write a lot about video games, but is capable of writing about other subjects, too. Twitter
