GameStop's Silent Store Closures Spark Concern
GameStop is quietly shutting down numerous US stores, leaving both customers and employees reeling. This wave of closures represents a significant decline for the once-dominant retailer, with nearly a third of its physical locations now closed. The lack of official communication from GameStop is fueling speculation and anxiety, as reports of store closures continue to surface on social media platforms like Twitter and Reddit.
The video game giant, with a history spanning over 44 years (originally known as Babbage's), reached its peak in 2015, boasting over 6,000 stores globally and $9 billion in annual sales. However, the shift to digital game sales has significantly impacted GameStop's profitability. By February 2024, ScrapeHero data indicated a nearly one-third reduction in physical stores, leaving approximately 3,000 locations in the US.
Following a December 2024 SEC filing hinting at further closures, a surge of social media posts from both customers and employees confirmed these fears. One Twitter user expressed concern over the closure of a seemingly successful store, fearing the impact on less profitable locations. Employee accounts also paint a picture of internal struggles, with reports of unrealistic performance targets as the company assesses store viability.
The Ongoing Decline of GameStop
The recent closures are a continuation of a downward trend for GameStop. A March 2024 Reuters report painted a grim outlook, highlighting the closure of 287 stores in the previous year following a nearly 20% revenue drop ($432 million) in the fourth quarter of 2023 compared to 2022.
Over the years, GameStop has attempted various strategies to revitalize its business, including expanding into merchandise, phone trade-ins, and collectible card grading, to adapt to the changing market and online purchasing habits. The company also benefited from a surge in popularity in 2021 thanks to a group of Reddit investors, a story documented in the Netflix documentary Eat the Rich: The GameStop Saga and the film Dumb Money. Despite these efforts, the ongoing store closures suggest a challenging path ahead for the iconic retailer.
