GameStop Sale To Another Company Could Be Announced By Mid-February, Report Says

At least two companies might want to buy GameStop.

44 Comments
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GameStop was once a total juggernaut in the video game space, but thanks to the rise in digital game sales and other factors, it's been relatively tough sledding for the company of late. Last June, the company announced that it was exploring the option to sell itself to another company, and now it appears a deal might be coming soon.

The Wall Street Journal reports that at least two companies are bidding for GameStop, and a deal to buy the retailer could become public by the middle of February. Citing a person familiar with GameStop, WSJ reported that private equity companies Sycamore Partners and Apollo Global Management are interested in buying GameStop.

Both companies declined to comment when approached by WSJ, and GameStop itself refused to elaborate on acquisition discussions.

Sycamore, which raised a further $4.75 billion USD in capital last July, specialises in consumer and retail investment, so going after GameStop makes sense.

Apollo, meanwhile, is a firm that prides itself of making investments in companies that have fallen out of favour--and this would also cover GameStop in theory. Apollo Equity co-president and lead partner Scott Kleinman says Apollo is looking for investment opportunities that "others are unable or willing to figure out."

An example of a company Apollo might go after would include one that has missed earnings for a few quarters, or a company that the market has given up on, or a company that operates in sector that has fallen out of favour. In periods of transition, some investors pull back, but Kleinman says Apollo is an investor with "conviction."

Longtime GameStop CEO Paul Raines died in March 2018 at the age of 53. He was replaced by Michael Mauler, who himself left after just three months for "personal reasons." Shane Kim, the former boss of Xbox during the Xbox 360 days, is GameStop's current CEO.

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Avatar image for atherworld
atherworld

Good riddance. They're never seeing another one of my pennies ever again. Stole almost 18,000 reward points and $2.54 in my account from me. Didn't even have the guts to talk to me either time I contacted Customer Service.

Avatar image for norrinradd
NorrinRadd

So, ages old internet hate of GameStop aside, it still is a juggernaut in the retail video game space. Stocks have been down due to weaker than expected sales, but that doesn't mean the company is losing money. It is and has been profitable for some time. It actually outsold Walmart and Target in its own market and has the unquestioned biggest market share and name recognition in the industry. The company is fading at about the same rate the entirety of retail is fading outside of the aforementioned super stores.

As much as people complain about the trade in values and used games in general, they sell for what they need to sell for. Remember that Walmart and Best Buy both tried to break into that market and neither of them could offer any more than what GameStop did, nor could those games cost less and still be worthwhile to sell. They both basically gave up doing so very quietly. The disconnect lies in the fact that people want to pay 30-40 bucks for a used game, max. But they also want to get 30-40 bucks minimum for a newer game in trade. That's never going to work.

And then people complain about prices. Unfortunately for that complaint, games cost the same thing everywhere. Best Buy and Amazon used to give discounts on new games. They quit doing so because it's a poor business model. So we're left with sales. By and large, those sales are worked out between the retailers and the publishers. And usually, things go on sale at the exact same price, at the exact same time, at every single place. Exclusive sales are a thing retailers promote loudly because they are rare. Unless you're Amazon, they get a few more.

Digital sales are a legitimate concern. PC has already gone down that road almost exclusively. The days are not far off when console will follow. That's why they've gotten into the collectible game. You'll probably see them dip into comic books and try to increase their share in collectible card games. I think they'll try to embrace the "geek culture" label and aim to transition into a boutique niche shop. If they're smart, they'll go for community events and host card tournaments and D&D campaigns. They'll still be a token acknowledgement of games. Maybe a corner of new releases and some retro stuff. But I don't think it's a coincidence that the company that bought Hot Topic is also after GameStop.

Avatar image for orionreplay
orionreplay

I don't need Gamestop, with a Walmart or Amazon available, but digital is not in my future because of the lack of true broadband where I live. I can get satellite with a 10gb data wall, or as I have chosen for my family, the distant edge of DSL but at least doesn't go out in rain or snow and it has no limits to data. It can not stream or download anything worthwhile. When that new physical game has a first day update, I'm downloading for several days.

I still get Gamestop gift cards at Christmas and I still make the 45 minute trek into town to the nearest Gamestop to peruse the shelves. Yes, my Gamestop is disturbingly becoming more a "Toystop" than "Gamestop" and speaking with the associates, they themselves also are not fans of the toys but must make room. I do still like going in and talking and listening and going through titles. I have been a Power Up Rewards guy for so many years, I forget when I did sign up. Decades? I do still trade in games even at ridiculous store credit, but they were just sitting there gathering dust. So I put them to use.

I am also not alone, so for some a Gamestop is still indeed a nice thing to have. Go to Walmart for your game and the person working in that section has no banter with you about levels or things to look for in game. It's just merely a purchase and you leave. Amazon was nice when Prime got you a discount and attracted me, but that seems to have gone away. So I take the kids and we go to Gamestop.

On a side note, I find it funny that in the day of digital, my two children are in awe of shopping malls and Gamestops. They want more. They think it amazing you can go to a store dedicated to video games and toys. They never want it to end.

Avatar image for Xbox360love2006
Xbox360love2006

Thank god we have more than one Games Ahoy! shop in my town for when Gamestop is bought out!! :D :D

Avatar image for trust2112
trust2112

Apollo Management? Aren't they the ones who invented Vulture Capitalism? Kiss your 401k goodbye, it's going to some CFO's private jet. He needs a gold sink next to his golden throne.

Avatar image for gerard2383
gerard2383

I hope the sale goes like this

Gamestop: Hello, Amazon i would like to sell you my company its probably worth 500 Million dollars. So i will take 450.

Amazon: How about 6 dollars in store credit?

Avatar image for jsprunk
JSprunk

Almost seems like a no-brainer for Amazon to buy and turn into another delivery spot for products.

Avatar image for trust2112
trust2112

@jsprunk: I thought that was what Whole Foods was for? Do people actually still shop there?

Avatar image for Xbox360love2006
Xbox360love2006

@trust2112: I shop at Whole Foods on occasion, but its more a grocery store than selling anything else that Amazon already sells online or at one of its physical stores....

Avatar image for jsprunk
JSprunk

@trust2112: I don't shop at Whole Foods, but I'm sure Amazon could put it's own spin on Gamestop stores to make them attractive again...and the delivery spot would just be a bonus. Plus, in my area Gamestops are far more numerous than Whole Foods stores, with probably less than half the employee headcount per area.

Avatar image for dhaynes25
dhaynes25

@jsprunk: I can actually see Amazon buying them. It makes perfect sense

Avatar image for Ovirew
Ovirew

I haven't really got any reason to knock Gamestop. They're still one of the first retail stores worth stopping at if you're looking for a particular game, one that might not be carried by most Walmart or Target stores. I think they've done a fairly decent job of stocking random collectible things and game-related swag in the past few years, to try to counter losses from digital.

It'll be kind of a sad day if the time comes when GS stores shut down for good. That could very well spell the death of the retail video game. And with that, the death of gamers having very many places to just visit while they're out and about on their day off, and maybe have a conversation about a game with another gamer.

Avatar image for Xbox360love2006
Xbox360love2006

@Ovirew: Try selling games to Gamestop than tell all of us you have no reason to knock them.. ;)

Avatar image for Ovirew
Ovirew

@Xbox360love2006: I've actually sold a lot of games to Gamestop over the years. Yeah, you don't get a lot back, but there've been times when my money situation wasn't so good and I had to do it. I'm thankful it was an option, at least I got fast cash that way.

Avatar image for lemie420
Lemie420

EA is going to buy gamestop and will change it to sell only loot boxes

Avatar image for guudgidga
guudgidga

What kind of business sells their "new" games in used cases and paper envelopes, and then tell you, "Oh, it's still new sir." No the hell it isn't.

No disrespect to the counter employees are just following orders. The broader business practice is what needs to go.

Avatar image for calgamer1
Calgamer1

@guudgidga: I just had this happen around Black Friday. I bought Horizon Zero Dawn new and they had to pull a case from the shelves and pop in the disc from an envelope, but ensured me it had never been played. Like I want that sucker still in its shrinkwrap, not pulled out of a paper envelope and put into a used case.

Avatar image for WarGreymon77
WarGreymon77

@guudgidga: Yeah, this is my biggest gripe with Gamestop. My copy of the Metal Gear Solid HD Collection has a big ol' price sticker on it because of this nonsense.

Avatar image for Thanatos2k
Thanatos2k

Do you want to set up a preorder for our inevitable collapse? Would you like to redeem your traded in Gamestop for store credit? Would you like a subscription to our Bankruptcy Filing?

Avatar image for JIMDOG4442002
JIMDOG4442002

Gamestop is the worst business ever. Just die already.

Avatar image for darksoleride
DarkSoleride

Just go away GameStop nobody likes you.

Nah on a serious note might be better for them to just be an online store then all the savings they make from firing everyone they can make better deals on the games and stay competitive with Amazon and other online retailers

Avatar image for atopp399
atopp399

I wish they would go away and the mom and pop shops they put out of business would come back

Avatar image for Thanatos2k
Thanatos2k

@atopp399: You're delusional if you think that would happen.

Avatar image for friggan
Friggan

They really started a down slide when they took over Think Geek and the stores became Pops are us. People want games and not a ton of other junk, the store by me is about 40% junk and 60% games, most sections have been reduced/eliminated to make way for all the pops and other crud.

I agree with some of the comments below, having a nice retro section would be nice, along with pricing that meets others. Their rewards offers are not what they used to be so unless you buy a LOT of used games, it's not really worth the investment.

Avatar image for Sindroid
Sindroid

@friggan: The only reason they survive is because they sell more plush toys and other stuff. I don´t mind it. What i do miss is game stores that DID have that mom and pop feeling. Where Magic players would hang out and play and stuff.

Avatar image for friggan
Friggan

@Sindroid:

True, those really gave them a feeling of being a part of the community! At this point they really need to reinvent themselves to remain in business.

Avatar image for darklordvyperx
darklordvyperx

Good, because gamestop needs a serious overhaul. I only preorder games there. They're "new" games have been opened and the discs put in a drawer. I'm sorry, but if I'm buying a new game, you idiots better not have opened it. If you've opened it, I'm paying used price for it.

Overpriced games, terrible service, terrible selection. I go to best buy or Walmart for games now unless I'm preordering.

Avatar image for redviperofdorne
redviperofdorne

I just go there to get an idea of what's out, what I would be interested in. Everything there is over-priced, Customer service is laughable and their selection is rather weak. The reason people buy online (either digitally or for a hard copy) is because they can get it as a far cheaper and reasonable price. GameStop doesn't offer that.

Avatar image for guudgidga
guudgidga

@redviperofdorne: I think hard copies are preferable to digital downloads for numerous reasons, but just not from GameStop.

Avatar image for spartanx169x
spartanx169x

Almost every single time without exception that I go to one of their stores I have a bad experience, from taking 20 minutes just to get checked out when it’s only 1 or 2 people in front of me , or being harassed to buy other things when I’m checking out. Customer service is the worst. Not to mention they are slow to put new games on sale compared to Bestbuy, Amazon and Walmart.

Avatar image for Saladudo
Saladudo

"Excuse me?! It's ma'am!!!"

Avatar image for DefunktJunk
DefunktJunk

@Saladudo: Sorry sir, I mean ma'am

Avatar image for lonewolf1044
lonewolf1044

When the internet, and internet providers evolved so did the ability to go digital which some years ago was forecasted to become popular in an few short years and it has become true. Heck, even some developers do not even put out hard copies now. Digital is an boon for some and question mark as well as you can DL but if there is no installer included you are stuck depending on the company. I like companies like GOG which includes the installer so I can play on all my systems.

Avatar image for Renunciation
Renunciation

Apollo Global Management: "Hey, GameStop, I'm interested in buying your company."

GameStop: "Would you like to sign up to our PowerUp Rewards program?"

Avatar image for wrestlefanatic7
wrestlefanatic7

RIP Gamestop. That top 90's store becoming the latest casualtiy of digital games killing physical copies.

Avatar image for vega2505
vega2505

Unless they start carrying games older than current gen and like one tiny shelf of 360/PS3 games, they're going to just die...no one cares about the dumb merch, no one cares about new games, everyone carries new games, Amazon will ship new games to your house...no, they need to invest in older and retro games, make it the store you go to for all your classic itches, from NES to PS3.

Honestly, when they liquidated all their PS2 games I pretty much stopped going there and switched to Ebay.

Avatar image for Sindroid
Sindroid

@vega2505: Still have PS3 and 360 games used here in small quantity of course. But the dude behind the counter told me that its a matter of time it all will be over as well for those.

Avatar image for Tekcor
Tekcor

@vega2505: I don't think they can be saved really. There isn't enough market for those older games. They sell some retro stuff, but demand isn't there. If it were, they'd have found that already and adapted.

They can't compete with digital, so they need to focus on hardware. Carry accessories that I can't get at Walmart, Target, or Best Buy. They also can't compete with Amazon, so focus on the instant-gratification that Amazon can't [yet] provide. Because if I have guests coming over and realize I need another controller for a Smash tournament, I'm not using Amazon. But I can get that at other major retailers too.

So focus on the things the others aren't selling. When I was looking for a flight stick / HOTAS for my PC, I would have loved if they carried at least one or two so I could put my hands on one. Instead I had to order from Amazon and hope it fit my hand well. Not that the world needs more streamers, but how about stuff like that? Desktop mics, cameras, mixboards, capture cards, sound absorbing panels... stuff like that.

Basically, they need to differentiate themselves. Because trying to compete with the others head-on isn't working and isn't going to start working.

Avatar image for Ice-Cube
Ice-Cube

Welcome to the digital world my friends.

Avatar image for Chaloner11
Chaloner11

I miss getting my games at KB Toys, Babbage’s Etc, and EB Games...

Avatar image for WarGreymon77
WarGreymon77

Toys R Us all over again?

Avatar image for Sindroid
Sindroid

@WarGreymon77: Toys don´t sell. As soon as kids hits age 4-5, they get their playtime needs trough a tablet screen.