GameStop's Silent Store Closures Spark Concern
GameStop is quietly shuttering numerous US stores, leaving both customers and employees reeling. The closures, often announced with little or no warning, represent a significant decline for the once-dominant video game retailer. While GameStop hasn't publicly acknowledged a widespread closure initiative, social media platforms like Twitter and Reddit are abuzz with reports from affected customers and employees since the beginning of the year.
GameStop, initially known as Babbage's, boasts a 44-year history. From its humble beginnings in a Dallas suburb in 1980, it expanded to over 6,000 global locations by 2015, generating approximately $9 billion in annual sales. However, the shift to digital game sales over the past nine years has significantly impacted its performance. As of February 2024, ScrapeHero data indicates a nearly one-third reduction in physical stores, with approximately 3,000 remaining in the US.
Following a December 2024 SEC filing hinting at further store closures, anecdotal evidence from both customers and employees continues to surface online. One Twitter user expressed disappointment over the closure of a seemingly successful local store, fearing this foreshadows the fate of less profitable locations. Employee accounts also highlight internal struggles, with reports of “ridiculous goals” imposed as the company assesses store viability.
The Ongoing Decline of GameStop
The recent closures are consistent with GameStop's downward trajectory. A March 2024 Reuters report painted a grim outlook, citing a 287-store closure in the previous year and a nearly 20% revenue drop ($432 million) in the fourth quarter of 2023 compared to 2022.
Over the years, GameStop has implemented various strategies to combat declining sales, including expanding into merchandise, phone trade-ins, and trading card grading. The company also experienced a brief resurgence in 2021 thanks to a surge of interest from Reddit-based amateur investors, a phenomenon documented in the Netflix documentary "Eat the Rich: The GameStop Saga" and the film "Dumb Money." However, these efforts haven't been enough to stem the tide of store closures. The future of GameStop remains uncertain as the company navigates the changing landscape of the video game industry.
