Over time we have seen just how much the future has made the past the distant memory we will come to know. We’ve seen how famous stores such as Blockbuster and Toy R Us have fallen like roman empires due to their inability to adapt to modern technology that the internet has played a massive part in.
However, there’s a possibility we may see another well-known store fall into the same fate; the other two came to mind. That store is the famed place to go for video games: GameStop.
But what lead to this sudden concern for the company? While perhaps the store chain is not as close to death as the other stores, the possibility is still range. That is where this article will come to explain.
Downloading the Problem
In the year of 2013, the brand new generation of consoles was starting to hit the market, which might have made much success for a store like GameStop who solely rely on these forms of profit. However, much like any achievement in technology, the dated factor of the previous use will bite back quite hard.
What I mean by this is that the new consoles started to make more and more game available for online purchase and download, not requiring a disc. This is a practice that has likely been inspired by PC gaming stores (Mainly Steam) that have allowed PC gamers to download right from their website.
Now, that the other consoles have gained this advantage, this means discs are becoming more dated by the year. Which as one can imagine, will not sell well, and therefore not make much profit for GameStop. Seeing how a majority of sales come more from game sales as opposed to console sells.
The Failure of Sprint
One of the biggest loses in their investments comes from their attempted partnership with the famed mobile phone company Sprint.
The story goes as GameStop wanted to expand their business demographic to more than just the games they sold. So they were able to make a deal with Sprint Moble to own and run multiple stores of the company across the country.
As one can imagine, this was a considerable risk. Unfortunately, the risk was not paying at the start. The business practices and overall management were not cutting the amount in revenue the stores were promised to make for the first few years. Even worse was when Sprint was then later sold in 2016 to AT&T. Resulting in even more money being lost on GameStop.
According to sources, GameStop has not been successful when it comes to finding buyers for “private equity.” This may have something to do with the previous two points brought up in the article. As the business that the company has been put through has not seen better days.
Because of this, the company as not been gaining the funding it needs to keep most of its stores in operation. It also doesn’t help that their stock has been plummeting in recent time due to their inability to gain this equity. Which has dropped its value as much as 500 million dollars.
However, there may still be hope for the company as more new game consoles can come in to save the profits that had been lost from before. The company has also tried to sell other memorabilia such as t-shirts, figurines, and funko pops. Although there is a doubt that those factors alone can be enough to save the company.