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Is GameStop Really Dying?

GameStop

As games increasingly become a bigger part of our daily lives, it seems physical retailers might become smaller before disappearing altogether, as a new report emerges that suggests GameStop is dying alongside the business model that sustained the company since 1999. Previous reports have suggested that GameStop might be in trouble, but only so much that it needed to pivot the way it approached sales, focusing more on luxury collectibles like Funko Pop figures and more expensive gaming paraphernalia to help mitigate digital distributions impact on profits.

GameStop has long been the subject of video game community memes, another factor that genuinely might have influenced the company's swift fall from grace. GameStop's trade-in policy, for instance, has been criticized by consumers for years now, but the punchline always hid the ugly truth that an exploitative system that short-changed gamers probably wasn't generating as much in sales as it could be. That being said, however, it has still remained the de facto best physical retailer for acquiring specific game merchandise, especially collector's editions and more niche items from the gaming world.

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Related: GameStop Lost a Massive $673 Million in 2018

That might not be the case for much longer, according to a report from Business Insider that speculates the demise of GameStop will be coming sooner rather than later. In the report, which outlines the downfall of the company, Business Insider asserts that the trend toward the bottom for GameStop began as early as 2013. The key factor, however, was the fact that GameStop was unable to sell itself to a major parent company in late 2018, an event that sent the company's stock into a free fall that has left it valued at $543 million. For context, six months ago, the company was tagged as being worth closer to $1.5 billion. It's a precipitous fall for the company.

GameStop Lost 673 Million In 2018

Still, if there's a grim solace to be had for GameStop, it's that the death of the physical retailer may be long and drawn out. Michael Pachter, an analyst at Wedbush specializing in the video game industry, went on record during an interview with Business Insider, stating that:

"Downloads became a thing and GameStop's business declined. They were just kind of oblivious to it...I definitely think it's a melting ice cube. For srue it's going to go away eventually. And for sure their future will be truncated and eliminated the day that discs stop being manufactured.

They [GameStop] just got a seven-more-year reprieve starting in 2020. GameStop's got about 10 years before that ice cube is fully melted."

The ten years Pachter is referring to begins with the announcement of the Microsoft and Sony next-gen consoles that play discs and ends when their projected life cycle stops. It's not a comforting outlook for the company, but it does mean consumers who still enjoy the feeling of picking up a new release at GameStop, whether it be at a midnight event or just stopping by, will be able to hold onto that feeling for a little bit longer. Just not too long, it seems, and the death of GameStop will truly be the end of an era for the games industry when it finally does occur.

Next: Why The Future Of Gaming Will See The Death Of Traditional Consoles

Source: Business Insider

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