GameStop shares down after losing millions in 2018
Earlier this week, GameStop revealed their 2018 financials which showed a loss of $673 million in the past year. The immediate result was a 13% drop in GameStop’s stock price, yet again calling into question the company’s long-term viability.
This is third full-year loss in GameStop history, though it also comes despite the $700 million sale of its Spring Mobile retail chain and the continued cluttering of GameStop stores with Pop! Figures, blind bag toys, and Five Nights at Freddy’s merchandise.
To be fair, the “collectibles” portion of GameStop’s business grew 11% in 2018. The big problem is game sales. GameStop has suffered from lower console/hardware sales, but much like other entertainment retailers, the company is also being impacted online retailers and digital game sales.
Is there a way out for GameStop? It’s getting harder to see one. With more states adopting a $15 minimum wage, struggling businesses, particularly retailers who hire young employees, are going to see their expenses jump just to keep their doors open. The trend towards digitally-downloaded gaming certainly won’t reverse any time soon, either.
This is where the editorializing begins, so feel free to click away if you only wanted the bare facts.
Personally, I can say that I feel less and less comfortable going to GameStop stores in recent years, particularly since they started carrying the collectibles and other “nerd swag.” The locations are cramped, it’s much more difficult to simply browse the shelves, and visiting the shop between November and December is an agoraphobiac’s nightmare. Add to that the more longstanding issues of questionable business practices, pushy salespeople peddling preorders and warranties, and a lackluster “Pro Rewards” program, there’s simply no advantage to going to a GameStop over shopping on Amazon with a few comfortable clicks.
I don’t know if it would help their bottom line, but here’s a few things that would help convince me to do more GameStop shopping:
- Clear the shelves. I know it’s too much to expect GameStop to drop the collectibles & apparel when it’s profitable for them, but there has to be more open space in the stores. My local GameStops still have Wii games on the shelves. Not Wii U, original Nintendo Wii. It makes some sense to keep Xbox 360 games available thanks to the Xbox One’s backwards compatibility, but the Wii, Wii U, Nintendo DS, PS3 and PSP games? Have a fire sale and get them out of there.
- Revamp the rewards program. The extra discount is fine and all, but that’s not usually enough to attract me to the store. How about free lifetime disc refinishing for games purchased at GameStop? Or free shipping from the website? Instead of a pay-up-front model, how about a loyalty model that increases your rewards automatically depending on how much you spend or how often you shop at GameStop? Most importantly, shut down Game Informer. It’s a detriment– not a benefit- of being a Pro Rewards member, and is little more than a loose collection of advertisements, advertisements disguised as articles, and the same Bay-Area moralizing and poorly-researched drivel that can be found on most gaming websites. Shut it down and pass the operational savings down to the customer in the form of lower prices.
- Address pricing. The online prices should reflect the prices in-store. GameStop isn’t the only retailer to have this issue, but it’s frustrating to go to a store expecting one price, then seeing another, higher price on the sticker. Also, if GameStop expects to sell many games as lone discs without the original case, there should be a lower price. Those people who don’t care about what their games look like in their hand or on their shelves at home? Yeah, they’re the ones most likely to be making the jump to digital-only purchases. The gamers who still want physical copies will not be enticed by a disc-only purchase unless there is a reasonable price difference to compensate.
I recognize that many gamers are celebrating the news that GameStop appears to be an endangered species, and in many ways, I understand that mindset. However, there is still value in having a dedicated gaming retail store, and in the United States, GameStop is basically all we have. If they tighten things up, who knows? Maybe they’ll rise again as a leaner, meaner, and more respected brand. I’m not taking that bet, though.
Source: One Angry Gamer