GameStop recently announced that they will be closing 500 under performing stores this year (2013) due to low system sales. Currently GameStop operates over 6,700 locations worldwide, so it’s certainly far from the end for the largest retailer of video games. However this could be the first leak on a large sinking ship.
The next gen Xbox and Sony sysystems may or may not be able to play used games, and the used game market is the core of GameStop’s business model. In addition, more games are going digital, and more publishers are relying less on the phyiscal release copies of games than ever before. To further complicate things for GameStop, other major retailers including Target and Best Buy to name a few are now carrying used gaming titles, and thus competing more directly with GameStop.
Most gamers don’t seem too concerned about GameStop’s potential demise. GameStop over the years has alienated the retro gamers, bought out smaller competitors and have pushed unwanted promotions down gamer’s throats. GameStop has been the “big boy on campus” for years, and it might be a situation where GameStop has become overconfident. Still, it’s hard to see people losing their jobs, because at the end of the day it’s the small guy working at the store level who is affected, and not the higher ups.
GameStop is publicly traded, and as of February 8th, 2013 GameStop’s stock was trading at $26.06 a share. Back in August of 2012, GameStop’s stock was trading at a low of a little over $15 a share.
Will GameStop be the next Blockbuster? Will we see all GameStops eventually close? How will GameStop’s closings affect the overall video game market?