GameStop Stops Efforts To Sell Itself, And Company Stock Takes A Nosedive

GameStop's future is still in question.

43 Comments
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GameStop has announced that it is no longer trying to sell itself to another company. The video game retail company did not provide further details as to what that means for its future, but its stock price has plunged dramatically as a result.

"GameStop's Board has now terminated efforts to pursue a sale of the company due to the lack of available financing on terms that would be commercially acceptable to a prospective acquirer," GameStop said in a blog post. The announcement caused investment stock in GameStop to plummet, with the trading value decreasing by more than 25 percent to $11.24 USD at the time of this writing.

The company first began looking for a potential buyer in June 2018. GameStop went into talks with private equity firms and also hired a financial advisor, according to sources familiar with the situation. However, GameStop never confirmed a sellout was a definitive final outcome, and said in a statement that it was exploring other solutions to its financial difficulties as well.

In a report by Variety, Wedbush Securities analyst Michael Pachter said that GameStop's decision to shift gears might mean that company was simply unable to find an investor. "A new console without a disc drive--unlikely, but possible--could kill [GameStop's] business," Pachter explained. "And all this talk of Amazon, Apple, and Google [streaming games] causes some to question whether there will be consoles at all."

GameStop has struggled to remain a relevant part of the game consumer model with the rise of digital distribution. As a result, the company has tried to account for lost sales by increasing its pivot towards used game sales and pop culture collectibles. However, the former has most likely been a shrinking margin for the company as well, with subscription services such as Xbox Game Pass, Games With Gold, and PlayStation Now offering a steady stream of older titles for less than their combined retail price.

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Avatar image for atherworld
atherworld

Or you know, offer used games at a real discount, not at a whole whopping $5 cheaper than new.

Avatar image for lion2447
lion2447

"...trading value decreasing by more than 25 percent to $11.24 USD at the time of this writing."

This is why shareholders are nothing more than greedy vultures. Only there to pick the meat off of a company. They don't care how well the company is doing or helping its long term future. They do nothing but suck the money out and then move on.

Avatar image for kgsg-19-2
kgsg-19-2

@lion2447: ughh... it's called economics and the stock market? You really think people who rely on the stock market as a job to not make money just cause a company isn't doing well? If you want to support them buy some shares if you want.

Avatar image for OldSchoolPlaya
OldSchoolPlaya

@lion2447: ...just like Gamestop has done to its customers since day one?

Avatar image for dragonsama
dragonsama

Everyone wishing for Gamestop's demise might want to watch this first.

https://www.youtube.com/watch?v=mS5Yjx7pMCA

Avatar image for Tidus1012
Tidus1012

There will always be the need for physical media, don't worry. An only digital console may never happen, maybe only in 50 years when all the people that grew with physical copies die.

Still in this time nearly 70% of gamers (including myself) prefers physical copies, no way in hell we are switching to digital.

Physical gaming is the way to be.

Avatar image for shiel44
shiel44

@Tidus1012: *console gamers

I used to feel the same way, but PC made the switch to digital gaming several years ago now... while physical copies DO exist, they are almost never the entire game and are glorified coasters.

Avatar image for hanzoblade1
Hanzoblade1

Nooooo, not Gamestop please! as an Argentinian that flies twice a year to the US, I love going to Gamestop and pick up a lot of physical games on sale, t shirts and toys, I love Gamestop and there is nothing like it down here, we have a couple of shops but they import everything and prices are crazy expensive. I'm flying to Chicago on March and the first thing i did was to locate the closest Gamestop shop.

Avatar image for Tidus1012
Tidus1012

@hanzoblade1: Sarcasm was heavy there.

Avatar image for Jinzo_111887
Jinzo_111887

@hanzoblade1: I'd like to see Fangamer buy them out so they become a merchandising distributor. People switching to digital likely means they won't be able to keep existing as a game seller as there's no system in place for used digital games, but their merchandising business might actually be a good business strategy going forward.

Avatar image for hanzoblade1
Hanzoblade1

@Jinzo_111887: I really hope for that, or they can also turn to some kind of pre-owned only sellers, or a meeting point for trades.

Avatar image for lionheartssj1
lionheartssj1

Say what you want about Gamestop, it's still important to have a physical options for games. Not only are there people without broadband internet (yes, they exist), many ISPs are enforcing data caps, which for modern gaming could kill your allotment with a couple games. Never mind the fact you're only paying for access to the game, you never own it. You're beholden to their servers, and in most cases, an internet connection to even play a game.

Avatar image for Barighm
Barighm

Best post goes to the guy below who said they shopped themselves only to be offered (ironically) a tiny fraction of their company's overall worth. So hilariously fitting if true.

Avatar image for Yams1980
Yams1980

Not sure how this store still exists. The company itself wishes it would just die, and the employees themselves are universally miserable.

Avatar image for howlingfantod
HowlingFantod

Oh man, GameStop is a rapidly sinking ship at this point. The slice of the video game sales pie that 'brick and mortar' shops like Gamestop represent is just getting smaller and smaller and smaller. And smaller. Unfortunately for them, everyone knows it, too. Their value is only going to decrease as time goes by unless they come up with some sort of creative solution. I think they should invest in making their stores more of a community destination. When I was going to college in Olympia, for example, there was a comic book store downtown that went out of its way to make the store a great place to hang out. The owner- sporting genuine enthusiasm- went out of his way to chat with everyone that came in, answer questions, recommend great titles, and just basically be a super chill dude. They put in a nice, comfy couch and encouraged customers to pick up and read through any comics they were interested in without any pressure to buy. Though it would require an investment of resources and giving more control and agency to individual store managers, I think GameStop could do something similar with their various branches. The stations they set up in-store for sampling games are almost never used (at least in the stores I frequent) and seem like a total afterthought. Put those things in front of some recliners, rotate new and cool games into the library of what's playable, don't set arbitrary time limits, put more stations in, etc. I could see running in-store gaming tournaments - fighting games, shooters, MOBAs, RTS, racing games, sports games - that gave out free merchandise to the winners. GameStop could sponsor and run an entire season of Madden or NBA 2k where every team is run and played by a local PowerUp Plus member. When the playoffs come around, you could hold all of those matches in-store so that all the eliminated players could watch and root people on. Give out a trophy to the winners. Hell, they could sell pizza and drinks to the spectators! GameStop could create and foster a local, community-based esports scene, basically. You know how media outlets often get access to a slice (even if sometimes they can only watch) of upcoming games so they can offer insights and impressions? Well, maybe GameStop could work out an arrangement with publishers/developers so they can have a 'Preview Night' that offers PowerUp Plus members that same access to a demo, playable or otherwise. GameStop could start carrying board games and open the store once a week after hours for a board game 'Game Night'. It's only going to get more difficult to bring in physical sales so I think if they want to survive, GameStop is going to have to make an effort to distinguish themselves from digital retailers by offering things you can only get in-person; they need to embrace local communities and make each store a destination!

Avatar image for Iamkalell
Iamkalell

Mixed feelings about this. I have an extreme dislike of GameStop and the company deserves it, but it makes me a bit worried about the future of physical copies of games.

Avatar image for Lordcrabfood
Lordcrabfood

People can hate on Gamestop, but when you are looking for those hard to find physical copies, Gamestop is a great place to search.

Avatar image for kootur
Kootur

Saddest thing is the last memory most people will have of Gamestop is that "It's Ma'am" Tranny.

Avatar image for The_Bones
The_Bones

Gamestop right now: "Why does nobody love me anymore?"

Avatar image for Thanatos2k
Thanatos2k

Because no one wants you. Maybe you can trade your business in for double trade back value and get a Game Informer subscription and a preorder for Anthem?

Avatar image for Sound_Demon
Sound_Demon

@Thanatos2k: GameInformer is trash tho, their sub is worthless.

Avatar image for Thanatos2k
Thanatos2k

@Sound_Demon: ....That's the joke

Avatar image for Sound_Demon
Sound_Demon

@Thanatos2k: D: oopsie

Avatar image for Barighm
Barighm

In other words, there were no takers, heh.

Avatar image for vakiva
Vakiva

Gamestop is hardly worth sympathy but you should all be worried about digital-only marketplaces for console games.

Avatar image for Barighm
Barighm

@vakiva: It's not so bad if we're talking DRM free.

Avatar image for Yomigaeru
Yomigaeru

@Barighm: My fear is that, with complete control of the supply, console makers might try to push for higher MSRP again. This push for "games as a service" is already bad enough, so I wouldn't put it past them to have a digital-only console market also have higher base prices and mandatory "always online" requirements (gotta push those paid online subs).

Avatar image for Barighm
Barighm

@Yomigaeru: Well, then we're not talking DRM free, are we?

Avatar image for friggan
Friggan

Ironic their stock took a big hit, it's like...............oh $500.00 worth of stock, we'll give you $7.50 , how the tables have turned, ha!

Avatar image for snugglebear
snugglebear

Aint nobody wanchu GameStop!

Avatar image for sd4138
sd4138

GameStop is my preferred way to buy games. I never buy digitally and don’t like buying games online so I hope they survive

Avatar image for Daveof89
Daveof89

@sd4138: better get used to buying online or find a different store

Avatar image for DarkRikuShadow
DarkRikuShadow

@Daveof89:

Wal-mart is going to be around for a while!

Avatar image for darklordvyperx
darklordvyperx

Just go bankrupt and shutdown. Gamestop has scammed customers for years. Selling new copies of games, after staff has opened them and put the discs in a CD sleeve, which is the definition of a used game by their own standards. Selling used games without a case and trying to sell them in a CD sleeve for the same price as a used game with a case. I hope they go under. It'll be their own fault.

Avatar image for Thanatos2k
Thanatos2k

@darklordvyperx: My favorite Gamestopism was when they were opening new copies of Xenoblade so they could sell them used at a mark up while claiming they were "sold out" of new copies.

Avatar image for darklordvyperx
darklordvyperx

@Thanatos2k: isn't that illegal or something?

Avatar image for darklordvyperx
darklordvyperx

@Thanatos2k: wow wtf lol

Avatar image for Daveof89
Daveof89

@darklordvyperx: I remember years ago, I got a game as a gift that I didn’t want. I tried to sell it to them, and they couldn’t take it BECAUSE IT WAS NEW. Seriously, they couldn’t buy shrink wrapped games. I took it home, opened it, put fingers on the disc, took it back, and they accepted it. What a joke.

Avatar image for darklordvyperx
darklordvyperx

@Daveof89: Yeah their policies are a joke. I quit shopping there after they tried to sell me wwe2k16 in a CD sleeve for $45. I told them to shove it and never went back.

Avatar image for valgaav_219
Valgaav_219

I still love Gamestop and I don't ever buy digitally. I really hope they manage to hang in there.

Avatar image for Yams1980
Yams1980

i hate the store, i've only bought a handful of things from them over the years because each time they either send me the wrong item or screw me over in other ways. Had similar problems with EB games, which i think they took over and both were trash.

I also prefer physical copies but sometimes you got no choice and have to buy digital versions. As long as theres still physical sales for amazon or bestbuy its fine. Its rough, the times are changing and its getting harder to buy a complete physical copy of a game.

Avatar image for videogameninja
videogameninja

Ouch.

Looks like Gamestop might be going the way of Blockbuster.

-Blockbuster? What’s that, Ninja?-

I think many could see the writing on the wall year ago so it shouldn’t come as a surprise.

I know that many feel it’s kind of their own fault for the state the company is in today (as well as the many sleights against gamers over the years.) but when Gamestop finally does kick the bucket it will be somewhat a sad day if not the very least the end of an era.

-OUTSTANDING LATE FEES NINJA APPROVED-

Avatar image for Hagan
Hagan

RIP