GameStop Stores Closing Amid Financial Struggles

GameStop's Quiet Store Closures Spark Customer and Employee Concerns

GameStop is quietly shutting down numerous US stores, leaving both customers and employees shocked and disappointed. This wave of closures reflects the retailer's ongoing decline, with its physical footprint shrinking by nearly a third. Social media platforms are buzzing with reports from affected customers and employees, painting a concerning picture of the company's future.

The world's largest physical retailer of new and used video games, GameStop boasts a history spanning over 44 years, originating as Babbage's in 1980. Boosted by the investment of former presidential candidate Ross Perot, GameStop reached its zenith in 2015, boasting over 6,000 global locations and nearly $9 billion in annual sales. However, the shift to digital game sales over the past nine years has significantly impacted the company. 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 store closures, customers and employees have taken to platforms like Twitter and Reddit to share news of closings. One Twitter user, @one-big-boss, expressed dismay over the closure of a seemingly successful local store, fearing this foreshadows the fate of less profitable locations. Employee accounts also reveal concerns, with one Canadian employee citing "ridiculous goals" imposed by upper management as they evaluate store viability.

The Ongoing Decline of GameStop

The recent closures continue a worrying trend for the struggling retailer. A March 2024 Reuters report predicted a bleak outlook for GameStop, citing a 287-store closure in the preceding year following a nearly 20% (approximately $432 million) revenue drop in the fourth quarter of 2023 compared to 2022.

Over the years, various strategies have been attempted to revitalize GameStop. To adapt to the changing landscape of online game sales, the company has explored diversification, expanding into video game-related merchandise, phone trade-ins, and trading card grading. The 2021 influx of investment from Reddit's amateur investor community, documented in works like the Netflix documentary Eat the Rich: The GameStop Saga and the film Dumb Money, provided a temporary lifeline. However, the recent closures suggest these efforts haven't been enough to stem the tide.