GameStop Shutters Stores Amid Industry Woes

GameStop's Silent Store Closures Spark Concern

The video game retailer GameStop is quietly shuttering numerous US stores, leaving customers and employees surprised and disheartened. This wave of closures underscores the company's ongoing decline, with its physical footprint shrinking by nearly one-third. Social media platforms are buzzing with customer and employee reports of store closings, painting a worrying picture for the future of the once-dominant retailer.

GameStop, the world's largest brick-and-mortar retailer of new and used video games, boasts a 44-year history, beginning as Babbage's in 1980. Reaching its zenith in 2015 with over 6,000 global locations and $9 billion in annual sales, the company has faced a significant downturn in the last nine years. The shift to digital game sales has significantly impacted GameStop, resulting in a nearly 33% reduction in physical stores by February 2024, leaving approximately 3,000 locations in the US, according to ScrapeHero.

Following a December 2024 SEC filing hinting at further store closures, customers and employees have taken to Twitter and Reddit to share news of closed locations. One Twitter user expressed disappointment over the closure of a seemingly successful local store, fearing this signals trouble for less profitable locations. Employee concerns are also surfacing, with reports of unrealistic sales targets as the company assesses store viability.

GameStop's Struggle Continues

The recent spate of closures reflects GameStop's ongoing struggles. A March 2024 Reuters report predicted a grim outlook, citing a 20% revenue drop ($432 million) in the fourth quarter of 2023 compared to the same period in 2022, along with 287 store closures over the previous year.

Over the years, various rescue plans have been attempted, both internally and externally. To adapt to the shift in consumer behavior towards online game purchases, GameStop has explored diverse strategies, including expanding into merchandise, phone trade-ins, and trading card grading. The company also received a significant boost in 2021 from a group of Reddit investors, a phenomenon documented in the Netflix documentary Eat the Rich: The GameStop Saga and the film Dumb Money.