GameStop are looking for a buyer

[Master Disaster]

It's been reported today that GameStop are in talks and currently looking for someone to buy the company, this comes after the company closed 150 stores and has seen sales fall year on year.

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It’s been a little while since we have spoken about Gamestop (NYSE:GME 15.75 0.04%) directly. Indeed, it was a little over a year ago. Early last year we covered the companies 2016 fiscal year where the company announced the closure of over one hundred and fifty stores.  A few months later came Gamestop’s Q1 results of 2017. Even then the company was on a downward trend, something that appears to have continued.

GameStop made the following statement earlier today.

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GameStop Corp. today confirmed it is in exploratory discussions with third parties regarding a potential transaction. There can be no assurance any agreement will result from these discussions. GameStop does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so.

It's been a dismal 5 years for GameStop, in that period their share price has fallen from ~$50 to ~$10 and they've seen multiple CEOs come and go however following this announcement their share price has risen by ~3%.

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Of course, there is no certainty of a buyout, the news has made a direct impact on the share price of Gamestop. The potential of a buyout has seen shares rise 12% since rumours first arose yesterday. The unveiling of these talks has seen prices rise by 3% so far for the day.

 

There’s little surprise that Gamestop is looking at options. The companies fortunes have been falling for a while now. This was made even clearer in May with CNBC reporting the resignation of CEO Michael Mauler. In addition to this, the hedge fund Tiger Management sent a letter to the board urging them to “launch a strategic review and revive shareholder confidence in the sustainability of the GameStop business model”

 

In five years, Gamestop’s shares have fallen from $56.53 at the end of November 2013, to lows of $12.46 following the earlier reported news in May.

https://wccftech.com/gamestop-in-talks-for-potential-buyout/

http://news.gamestop.com/news-releases/news-release-details/gamestop-confirms-exploratory-discussions-third-parties

 

Nobody in their right mind would buy this business model, brick & mortar video game shops are almost a dead relic of the past at this point. Rich from Review Tech USA showed a nice graph showing how in 2007 physical sales were at 70% and now in 2017 physical sales were 20%.

 

The only way this business can survive is if someone guts it's and does a HUGE restructure, and even then they'll still struggle to compete with the already big players. It's another Blockbuster video story, once the biggest in the business but they failed to notice the change coming and got left behind.

[Syfes]

They would have to give me money for me to take it off their hands...

[Shimejii]

Its been a POS place to go to for most things anyhow. There is almost no benefit of going to them now besides Release day stuff for the Avid fans and even then

[Bananasplit_00]

"Il give you $10 for that game stop"

[Daiyus]

11 minutes ago, Master Disaster said:

Nobody in their right mind would buy this business model, brick & mortar video game shops are almost a dead relic of the past at this point. Rich from Review Tech USA showed a nice graph showing how in 2007 physical sales were at 70% and now in 2017 physical sales were 20%.

I miss physical editions of PC games. I bought physical copies up to the point where it became practically impossible due to brick & mortar stores closing down or ceasing to stock PC titles due to digital distribution becoming more popular. I understand why the shift happened, but I still feel sad about it.

[nickyteddy]

I have always loved physical copies of games. I have a collection of Wii games that I love but I sadly don't get physical PC games due to the fact that I lack a DVD drive, downloads off DVDs take far longer than digital and there's not enough games on the DVD format at my local Gamestop to bother going physical (most new physical PC games come with a code to activate it on platforms like Steam so you can't use the same game on multiple systems which I found inconvenient). I have the odd PC DVD-ROM lying about but they're old so compatibility is usually a problem.

[Ginger_]

If they had more games for old consoles and paid a fair price for used games I would probably go there. Right now the only thing they offer is games priced the same or higher than an instant download and some mediocre accessories. It's no wonder they're going out of business slowly. 

[Princess Luna]

Same end as Blockbuster xd....

[mynameisjuan]

I hope no one buys it so it can die already.

[Misanthrope]

Small retail space for videogames? Can't think of a worst chain to buy at the moment.

[Brooksie359]

I mean I always found best buy to be much better with return policys than gamestop so even when I did buy console games I would always choose best buy over them. I mean it kinda makes sense why they went out of business as they don't really offer anything of value over digital copies or even other physical retailers that sell games. 

[goodtofufriday]

4 hours ago, Master Disaster said:

Nobody in their right mind would buy this business model, brick & mortar video game shops are almost a dead relic of the past at this point. Rich from Review Tech USA showed a nice graph showing how in 2007 physical sales were at 70% and now in 2017 physical sales were 20%.

I saw this too but I think the graph is disingenuous as it included PC game sales. And for a long long time PC game sales, especially with steam, are digital.

 

I want to see this graph Exclude pc games. I feel like it would look very different.  

[Tribalinius]

My closest EBGames locations saw major changes since GameStop bought ThinkGeek. It went from an 80-20 video game/geek stuff ratio to something like 70/30 geek stuff/video game ratio. It's pretty depressing to look at from a video game collector perspective. I'm on the Switch full set quest and finding "rarer" release day titles or stuff you know is only getting a single print in an EBGames is getting harder nowadays. I absolutely need to rely on preordering/buying online otherwise I would not find anything out there beside Mario Odyssey, BotW or Just Dance. It's the same at WalMart and Best Buy in my area. Funny enough, TRU got a decent selection but I rarely see any deals.

[Rune]

6 hours ago, Daiyus said:

I miss physical editions of PC games. I bought physical copies up to the point where it became practically impossible due to brick & mortar stores closing down or ceasing to stock PC titles due to digital distribution becoming more popular. I understand why the shift happened, but I still feel sad about it.

Agreed. I actually ordered the physical versions of battlefield from Origin before they turned off that option. Something about having a physical collection that is different.

[Shreyas1]

7 hours ago, Daiyus said:

I miss physical editions of PC games. I bought physical copies up to the point where it became practically impossible due to brick & mortar stores closing down or ceasing to stock PC titles due to digital distribution becoming more popular. I understand why the shift happened, but I still feel sad about it.

Maybe its because its just insert disk and play? I mean, a lot of video games nowadays are more than 50GBs and I remember battlefront 2 being closer to 80GBs.

 

[AGrider]

Its kinda sad that sharing the game store experience with my kids has been relegated to my living room and a digital purchase. 

[Master Disaster]

3 hours ago, goodtofufriday said:

I saw this too but I think the graph is disingenuous as it included PC game sales. And for a long long time PC game sales, especially with steam, are digital.

 

I want to see this graph Exclude pc games. I feel like it would look very different.  

I don't see how that changes anything, GameStop are in the video games business and PC games are still video games. You can't ignore PC games entirely simply because the platform has more of a tendency to prefer digital sales over physical sales.

[Space Reptile]

maybe they can trade in the company for a handshake and 300$ instore cedit at the bank 

[BlueChinchillaEatingDorito]

3 hours ago, Tribalinius said:

My closest EBGames locations saw major changes since GameStop bought ThinkGeek. It went from an 80-20 video game/geek stuff ratio to something like 70/30 geek stuff/video game ratio. It's pretty depressing to look at from a video game collector perspective. 

The same applies to audio CD retailers. You have so many selling posters, figures, even board games for crying out loud. 

[AlTech]

1 minute ago, Space Reptile said:

maybe they can trade in the company for a handshake and 300$ instore cedit at the bank 

Purchase your local GameStop location today for just $299.99 !

 

Terms and Conditions Apply*

 

* You agree to inherit all our debt and pay the debtors all the money we owe them. gl hf. 

</Joke>

[AlTech]

Nah but seriously, it's about time. They've been struggling for quite a while.

[Master Disaster]

17 minutes ago, AluminiumTech said:

Purchase your local GameStop location today for just $299.99 !

 

Terms and Conditions Apply*

 

* You agree to inherit all our debt and pay the debtors all the money we owe them. gl hf. 

</Joke>

It might end up one of those $1/£1 deals tbh

[goodtofufriday]

34 minutes ago, Master Disaster said:

I don't see how that changes anything, GameStop are in the video games business and PC games are still video games. You can't ignore PC games entirely simply because the platform has more of a tendency to prefer digital sales over physical sales.

Gamestop does not cater to physical pc sales outside maybe 10 boxes they keep on a shelf. This has been true for most of gamestops existance since the PS3/360/Wii era. So Gamestops total physical sales did not significantly include pc games, thus the number of pc games purchased online is largely irrelevant when considering gamestop physical sales and its decline over time.

 

Thus a graph that excludes pc sales in necessary to properly gauge the reduction in sales for gamestop.

[Master Disaster]

4 minutes ago, goodtofufriday said:

Gamestop does not cater to physical pc sales outside maybe 10 boxes they keep on a shelf. This has been true for most of gamestops existance since the PS3/360/Wii era. So Gamestops total physical sales did not significantly include pc games, thus the number of pc games purchased online is largely irrelevant when considering gamestop physical sales and its decline over time.

 

Thus a graph that excludes pc sales in necessary to properly gauge the reduction in sales for gamestop.

Thanks for clearing that up. I'm from England so we don't have GameStop and our equivalent (which I believe is part of the same group) do sell PC games.

[goodtofufriday]

2 minutes ago, Master Disaster said:

Thanks for clearing that up. I'm from England so we don't have GameStop and our equivalent (which I believe is part of the same group) do sell PC games.

Ah fair enough. Even on gamestops website ,outside of physical editions that include statues or other goods, there are very, very few physical pc games available to purchase. And of those only the larger triple A titles are available. Even less so in stores.