If you’ve bought stock in GameStop, it might be time to hit the eject button. Things aren’t looking good for the company. GameStop is one of the last bastions of brick and mortar retail hope in a an increasingly digital landscape. The American retail chain operates 7,117 stores throughout the US, Canada, Australia, New Zealand, and Europe.
This strip mall staple is often the subject of internet hate, because many consumers believe the publicly traded company implements unfair pricing practices. The retailer is frequently roasted with hilarious memes.
Over the past financial quarter, GameStop’s profit has decreased by over 10%, a massive margin for a company this size. In addition, their stock has plummeted over 10%, potentially a sign of the companies impending downfall unless they can make some major changes.
Because of these losses and their continual struggle to attain profitability, GameStop will be closing 150 of their stores in the upcoming year.
The reason for their reduced sales numbers is pretty simple, GameStop is going the way of BlockBuster video. Digital downloads are becoming more and more prevalent, and people are buying their consoles on Amazon. The physical copies of the games that GameStop sells are becoming less popular because most gamers either download their games or order them online instead of going into stores.
GameStop is known for buying and selling used game and consoles, but a lot of bad press has made many gamers hesitant to go to the stores. They operate a buy and trade program that allows customers to purchase games, then sell them back when they’re finished. Many customers believe the buy back prices are unfairly low and the pre-owned prices artificially high.
GameStop says they’re going to try to move away from selling physical copies in an attempt to diversify the merchandise they sell so they can stay afloat. Not to hit them when they’re down, but they were also once rated as one of the worst companies to work for in America.
It’s a gamble, but it may be the only way forward for a company whose market is slowly disappearing. The Steam store, Blizzard‘s move to online purchases, and Microsoft, Sony, and Nintendo also making their titles available through an online store have nearly pushed GameStop out of the market.