Support NeoGAF

[Kdad]

GameStop Posts USD$111m Loss; Xbox Series X Launch Details Revealed - TheGamingEconomy.com

In today’s digest from TheGamingEconomy: GameStop posts USD$111m loss; Xbox Series X launch details revealed; and Grimorio of Games and JanduSoft secure USD$450,000.

www.thegamingeconomy.com

Video game retailer GameStop has posted a net loss of USD$111.3m (£85.8m) for the second quarter of its financial year, ended 1st August 2020. Once adjusted, the net loss from continuing operations of USD$91.2m (£70.3m) through the period is significantly wider than the adjusted net loss of USD$32.0m (£24.7m) posted in Q2 2019. Moreover, net sales declined by 26.7% to USD$942m (£726m), attributed to the expected slowdown in current-generation console sales as well as a 13% reduction in store opening days as a result of the Covid-19 pandemic. However, GameStop’s online operations continued to accelerate rapidly, with its e-commerce sales up by 800%.

In the subsequent earnings call with investors, GameStop CFO Jim Bell confirmed that the Texas-based firm permanently shuttered 206 of its stores during the quarter, with 388 closed worldwide so far through 2020. The retailer purportedly aims to close approximately 400-450 outlets in total by the close of the 2020-2021 financial year.

 

[DunDunDunpachi]

The slow spiral...

 

[Woo-Fu]

I'm not sure why anybody would own shares in Gamestop. Somebody explain that one to me.

 

[KormaChameleon]

It would be foolish to own shares in a slowly dying retailer.

 

[cormack12]

Video game retailer GameStop has posted a net loss of USD$111.3m (£85.8m) for the second quarter of its financial year, ended 1st August 2020. Once adjusted, the net loss from continuing operations of USD$91.2m (£70.3m) through the period is significantly wider than the adjusted net loss of USD$32.0m (£24.7m) posted in Q2 2019. Moreover, net sales declined by 26.7% to USD$942m (£726m), attributed to the expected slowdown in current-generation console sales as well as a 13% reduction in store opening days as a result of the Covid-19 pandemic. However, GameStop’s online operations continued to accelerate rapidly, with its e-commerce sales up by 800%.

In the subsequent earnings call with investors, GameStop CFO Jim Bell confirmed that the Texas-based firm permanently shuttered 206 of its stores during the quarter, with 388 closed worldwide so far through 2020. The retailer purportedly aims to close approximately 400-450 outlets in total by the close of the 2020-2021 financial year.

Rent and staff revenue biggest costs. They need to look at shopto for a focused online brand, and focus on high footfall branches only. Or smaller trade in stations

 

[JordanN]

I'm not sure why anybody would own shares in Gamestop. Somebody explain that one to me.

Isn't Reggie fils Aime one of the board of directors?

 

[Rubik8]

Finally getting some satisfaction watching GameStop die slowly. I have always hated them after they bought out my beloved Funcoland.

 

[captainraincoat]

and this is one of the reasons im wary of slapping down $200 aud (about 150 usd) on a preorder for a console when their parent company is in the shit and has been in the shit for a long time
their business model is based of gouging customer on pre-owned games,with a digital future it erodes pretty quick

 

[Kdad]

Isn't Reggie fils Aime one of the board of directors?

Yep...250K/year for I think it was 8 meetings?

 

[Darklor01]

I'm not sure why anybody would own shares in Gamestop. Somebody explain that one to me.

Do venture capitalists currently own the shares and sit on the board yet? If so, kiss that chain goodbye sooner rather than later.

 

[Woo-Fu]

Do venture capitalists currently own the shares and sit on the board yet? If so, kiss that chain goodbye sooner rather than later.

I think the plan is to get rid of all the brick&mortar and grow the online business. I just don't know what they have to offer over any of the bigger fish online.

 

[Vawn]

I almost expected them to just give it up when COVID started. Any chance they had was pretty much gone after this year.

 

[StreetsofBeige]

As crazy as it sounds I remember seeing GS's balance sheet a year ago when things were already going sour and believe it or not it didn't look that bad. It's not like a Sears. But maybe things really changed a lot the past year.

If things don't improve, they'll eventually go broke or bought out, but as long as things don't get too bad they can probably last a while more.

What sapped them of money was they used to pay a big dividend. That probably gutted their financials a good billion dollars over the past decade.

Unless a company is doing great and stable, never pay out a dividend. It bites companies in the ass all the time.

Not saying Kodak would still be a viable company, but that company probably paid out $10s of billions of dividends in its history. They could have used that went things went south over 10+ years ago.

 

[TKOFromTokyo]

I Was never a huge fan of GS/Funcoland. They would typically charge more for games than the big box stores back in the early 90s. I also had a really bad experience there once during the early 2000s and basically swore the place off. I’ve been inside maybe a handful of times for random hard to find items and I find them to be dirty, dingy, and like I should be living in my parents’ basement shopping there. I’d much rather shop at Best Buy, Target, or even Walmart.

 

[JLMC469]

I’ve been saying this for years. This is a slowly sinking ship.

 

[Darklor01]

I think the plan is to get rid of all the brick&mortar and grow the online business. I just don't know what they have to offer over any of the bigger fish online.

I'd imagine that's the way to go to save the business.

 

[diffusionx]

Digital distribution of games went from basically 0% to 70% in one generation - how can any company survive when they lose 70% of their market in seven years? I am actually surprised they found ways to stem the bleeding and seem to have a path forward, albeit in a deeply diminished state.

 

[reinking]

Finally getting some satisfaction watching GameStop die slowly. I have always hated them after they bought out my beloved Funcoland.

I was a store manager at an EB location when that whole buyout happened. I managed to last about 18 months with GS before deciding the company was not for me. Their whole philosophy felt dirty and so was my district manger. He was knowingly allowing stores to take stolen items in trade to pad the preowned numbers. I never did and called him out on it when he tried to influence me to do so.

I can't say I am happy to see them go under because the frontline employees deserve better but I am not going to shed a tear.

 

[Goro Majima]

They've been having some weird sales on Gamestop.com lately that make me feel like they're just doing everything they can to clear cheap used inventory. It's always some crazy sale with a limit of $29.99 per game.

Plus all of those "You want this box" sales to get rid of random physical junk.

They also haven't really replenished inventory of their retro games and I noticed they aren't really giving much for them anymore in trade values.

To me I don't see a company operating with a desire to grow so much as cashing out as much as they can on their way out.

 

[belmarduk]

Yeah...
I remember you always used to get cool bonuses by pre-ordering games from Gamestop... but now they rarely have those and charge a $10 fee for receiving a game you ordered on launch day. Its really no wonder they're failing.

 

[jshackles]

The slow spiral...

I wish I had so much money that a loss of over one hundred million dollars would be considered slow.

Seriously though, who still shops at Game Stop? They are literally the last place I would ever want to buy games these days. Their stores are filled with tacky shit that nobody needs (sorry Funko Pop lovers). Don't they still open "new" games before they sell them? Buying used games is always a roll of the dice on what you'll actually get - especially when buying online. Their trade in prices are typically a joke and are mocked mercilessly like every employee is the guy from Pawn Stars.

But as much of a joke Game Stop is, it seems inevitable that digital distribution is taking over next-gen in a big way and that'll cut them completely out of the picture. Good riddance, I say.

 

[Goro Majima]

Buying used games is always a roll of the dice on what you'll actually get - especially when buying online.

I'll say it forever but it never ceases to amaze me that Gamestop didn't figure out a way to let people pay extra for CIB games online.

 

[THE DUCK]

This is why it seems so odd to me that MS chose them for the all access program in Canada, why not best buy too?

 

[GymWolf]

They have my money for ps5 preorder, let me get the console before closing, please and thank you.

 

[jigglet]

The wuhanvirus has boosted the shares of just about every video game related company out there. My Nintendo shares almost doubled. Gamestop would have had a big year too if they had made a faster transition to an online-only store - all those retail stores with crazy high rent is what has killed them. If they were just a few years ahead of schedule I think they would have made a pretty epic comeback this year.

 

[synchronicity]

I'm not sure why anybody would own shares in Gamestop. Somebody explain that one to me.

GME has only been worth shorting for a long time. $0 is near inevitable imo.

 

[YCoCg]

Yep...250K/year for I think it was 8 meetings?

To be fair he was straight to the point in those meetings:

 

[zeorhymer]

GS has no leverage to do anything actually. Their model is still based on second hand sales. Anyone can do that now with FB Marketplace, Amazon or Ebay. They can't stream games because it's the publishers that control that. Every retailer can sell physicals. There's nothing that GS can do that is better than any other company.

 

[CitizenX]

Insert the usual quarterly, "Gamestop finally dying...but sorry to those losing their job" incoming YT videos.

 

[StormCell]

They should also look at reducing their stores to vending machines. One of the few/only reasons I like having a Gamestop is because they're better than Walmart at actually having games. If I can just get that in a vending machine at my local mall, I will take it.

 

[EverydayBeast]

Digital is getting increasingly better that’s why

 

[DeepEnigma]

 

[Danny Dudekisser]

We don't like you, Gamestop

 

[ultrazilla]

 

[Northeastmonk]

I don’t find their brand to be appealing. I liked them more when they were Babbages and the other side EB Games. I miss going to a store and seeing a demo that wasn’t released yet or maybe a demo kiosk of a new unreleased console. Even midnight launches are 9 PM. I’d rather just order it and have it delivered. The more you become aware of spending money on games, the less you’ll need GameStop to get you what you’ll need.

 

[NickFire]

I miss the old days when going to a video game specialty store was a big deal. But unfortunately I think we have maybe three more years of these stores existing (excluding the rare independent "now a novelty" store that might pop up or survive). Even that might be a major stretch. Once the used games market for current gen becomes truly niche, I just don't see where their future lies. With both Sony and MS releasing cheaper digital versions, the end is nigh.

 

[levyjl1988]

It's gonna die the same way Blockbuster did.

 

[StreetsofBeige]

I don’t find their brand to be appealing. I liked them more when they were Babbages and the other side EB Games. I miss going to a store and seeing a demo that wasn’t released yet or maybe a demo kiosk of a new unreleased console. Even midnight launches are 9 PM. I’d rather just order it and have it delivered. The more you become aware of spending money on games, the less you’ll need GameStop to get you what you’ll need.

All I know is this when they came to Canada.

Electronics Boutique maybe around 1995(?)
- Super friendly
- Price match
- Return policy of 10 days
- No ragging and nagging about magazine upselling, disc guarantees, pre-orders etc.....
- Low prices. Typically the lowest, or you get them to price match. Back then games were mostly got at game shops, computer stores, Zellers etc... as you didn't have the ton of Walmarts or Future Shop/Best Buy where they also had matching prices
- They were so good with prices. I remember having them price match some small computer shop on PC games from ads you'd see in those free grubby weekly/monthly computer papers you pick up at a computer shop. No problem. Just show them the ad

Somewhere around early 2000s it changed
- By this time, gaming is now concentrated in big stores, where most mom and pop shops are dying fast or bought out by EB in a strip mall
- The stereo shop salesmanship where you take one step in the store and a clerk already has his vulture eyes on you
- No price match
- No return policy
- Upselling anything at the counter
- High prices, and similarly high used game prices too

Last 5+ years
- Half the store is Funko toys, Call of Duty Monopoly sets, deck building games and other stuff. While they used to have the biggest selection of new and used games, now their selection is probably 1/4 what it used to be. I understand digital purchases have eaten up sales, but not everyone only buys the latest games

EB used to be one of those stores you'd see racks of games and you'd browse in peace. Then it turned into one of those stores where you're interested to see what they have, but you know you got to be quick or else clerkboy will come by trying to make a sale so you spend less time there or purposely browse the other side of the store hoping he doesn't make the effort to come by.

 

[The Infectious Paradox]

Shoutout to the Famelot

 

[SegaShack]

All I know is this when they came to Canada.

Electronics Boutique maybe around 1995(?)
- Super friendly
- Price match
- Return policy of 10 days
- No ragging and nagging about magazine upselling, disc guarantees, pre-orders etc.....
- Low prices. Typically the lowest, or you get them to price match. Back then games were mostly got at game shops, computer stores, Zellers etc... as you didn't have the ton of Walmarts or Future Shop/Best Buy where they also had matching prices

Somewhere around early 2000s it changed
- By this time, gaming is now concentrated in big stores, where most mom and pop shops are dying fast or bought out by EB in a strip mall
- The stereo shop salesmanship where you take one step in the store and a clerk already has his vulture eyes on you
- No price match
- No return policy
- Upselling anything at the counter
- High prices, and similarly high used game prices too

Last 5+ years
- Half the store is Funko toys, Call of Duty Monopoly sets, deck building games and other stuff. While they used to have the biggest selection of new and used games, now their selection is probably 1/4 what it used to be. I understand digital purchases have eaten up sales, but not everyone only buys the latest games

I also want to point out how pre 2005 both EB games and GS had classic games for almost every system. I loved it. Good prices too. Everyone went up in price once GS stopped selling old games.

The employees were cool back then cause they were knowledgable on gaming on all platforms, retro and current.

 

[Blond]

Gamestop should've realized they're a specialty store years ago. I still often see 3-4 of them within a couple miles of each other, they aren't starbucks. A single store with more selection than 4 with mediocre ones would serve them a whole lot better.

 

[diffusionx]

Gamestop should've realized they're a specialty store years ago. I still often see 3-4 of them within a couple miles of each other, they aren't starbucks. A single store with more selection than 4 with mediocre ones would serve them a whole lot better.

I used to see that - there were 4 within a 15 minute drive where I lived around the time of Halo 3 - but they're all gone. One of them also took over one of the few indie game shops that was around in NJ at the time too. All gone.

 

[Zog]

They need to stop carrying toys and start carrying retro games.

 

[jshackles]

They need to stop carrying toys and start carrying retro games.

They sell a bunch of retro games online. They just need to shut down all of their ridiculous stores and become and online-only outfit.

 

[StreetsofBeige]

Gamestop should've realized they're a specialty store years ago. I still often see 3-4 of them within a couple miles of each other, they aren't starbucks. A single store with more selection than 4 with mediocre ones would serve them a whole lot better.

There's a mall near my work that used to have a big GS on one end and a small EB on the other. It was like this for at least 6-7 years until they gassed the big GS.

???

 

[sublimit]

Covid on one hand and people's stupidity on the other one these are hard times for any retailer out there. I hope they stay alive and remain in business and sometime soon become profitable again.

 

[Zog]

They sell a bunch of retro games online. They just need to shut down all of their ridiculous stores and become and online-only outfit.

No one wants to buy used games online from them. You don't know what you will get. It's not like ebay where you can see a picture of the exact item you are buying. No, they need to carry retro games IN STORE.

 

[jshackles]

No one wants to buy used games online from them. You don't know what you will get. It's not like ebay where you can see a picture of the exact item you are buying. No, they need to carry retro games IN STORE.

That's all well and good - but for the same reason you don't want to buy from their online stock of retro goods, nobody is going to want to sell their retro game collection to Game Stop. Shitty trade-in values compared with what you can get on eBay or facebook marketplace being chief among them but also product availability for long out-of-print items means they would have trouble keeping their stores stocked properly. It also means they would need some pretty elaborate setups behind the counter that would allow them to test games - and employees knowledgeable enough to spot fakes and reproductions. All this adds up to a huge costs where they will at best be able to operate on a razor thin margin.

Sure it'd be nice, but it's not viable.

 

[StreetsofBeige]

I haven't bought a used game in a while, but when I did it's always been in person. Never bought a used game online at Best Buy or EB. I want to see how mangled the box is.

As for stores putting more stuff in store or online there's a case for both. Someone like me goes for buying in-person used games. But spreading old used stuff across stores might be thin. Having everything consolidated online can attract a bigger pool of people, but anyone like me is out.

 

[Zog]

That's all well and good - but for the same reason you don't want to buy from their online stock of retro goods, nobody is going to want to sell their retro game collection to Game Stop. Shitty trade-in values compared with what you can get on eBay or facebook marketplace being chief among them but also product availability for long out-of-print items means they would have trouble keeping their stores stocked properly. It also means they would need some pretty elaborate setups behind the counter that would allow them to test games - and employees knowledgeable enough to spot fakes and reproductions. All this adds up to a huge costs where they will at best be able to operate on a razor thin margin.

Sure it'd be nice, but it's not viable.

They could make it happen if they wanted to. It seems they would rather go bankrupt.

I would be more willing to buy online from them if they showed me pictures of the actual product.

I should point out that if they had retro games on display in the stores, they would get more retro trade ins as people would know they take retro games.