If you’re a longtime fan of video game culture or just enjoy casually perusing what’s available, you probably have some experience with GameStop. For many, if you wanted to pick up a new title, GameStop was the place to go. Despite that, the modern video game market seems to be hitting the store very hard, and costs are supposedly having to be cut in response.
What led to GameStop’s sales falling?
While it might not seem immediately obvious as to why a once-great video game retailer is now struggling, the reasons are actually fairly straightforward: competition, an uncertain economy, and the rise of digital sales. To an extent, GameStop has always struggled with competition. For many casual gamers, it may not be worth going out of the way to go to a GameStop when games can be bought somewhere like Walmart anyway. Add on top of that the ever-increasing influence of sites like Amazon and eBay, and you’ve got a recipe for disaster.
For the longest time, if you wanted to pick up a new video game to try, your best option was to head to a store and buy it. Digital purchases did exist, but they weren’t as accessible or convenient as they are today. If you want to try out a new game now, you’re more likely than not just going to head to the shopping app on your system and purchase it from the comfort of your own home. Via Reuters — Michael Pachter, analyst for Wedbush Securities put it simply when he said: “An increasing mix of digital downloads is hurting physical retail, and there is simply no reason to go to the store if a consumer can just order a game and download it immediately.”
What does this mean for the future of GameStop?
Whether or not GameStop will be able to adapt to the modern video game market is uncertain. While it’s unlikely that physical sales of games will ever stop, storefronts dedicated to them may end up no longer being commercially viable on their own. Some believe that sooner or later, it won’t be possible for them to recover. “I suspect that they’ll keep trimming costs to generate breakeven or better, but it’s inevitable that their sales will decline to an unsustainable level,” said Pachter.
All of this is nothing new, GameStop has been on a decline for the past few years. 2020 and 2021 saw significant store closures to keep up with financial issues, and 2022 saw more mass layoffs for similar reasons as today. As of writing this, the total number of people who lost their jobs as a result of this has not been released. It’s fair to say that all of this may be writing on the wall for what’s to come in the future. Of course, that could be entirely wrong and GameStop could find a way to bounce back, but it’s impossible to know right now.
Leave a Comment
Written by Abbie Maxwell
Lifelong Nintendo fangirl, Abbie holds a special place in her heart for video games. She has always strived to provide tips and tricks to make the experiences of those who share her passions that much better.
