Digital death: Are GameStop, Blockbuster going down in identical dust?

The Truth About Working at GameStop: Workers Reveal Their Experiences

Digital death: Are GameStop, Blockbuster going down in identical dust?

The past few years have been turbulent for GameStop. A combination of increasing digital sales and stores Walmart and Amazon aggressively lowering their prices on new video games has seen a drop in consumer interest in the 36-year-old video game-focused retail chain. It's taken a toll.

In March 2017, GameStop announced plans to close 150 of its 7,500 stores. Speaking about the closures, Rob Lloyd, GameStop CFO at the time, said, “As we continue the transformation of GameStop, part of our diversification strategy is to rationalize our global store footprint to ensure we have the right mix of stores and merchandise that meets our customers’ needs.” That year, global sales for GameStop dropped by 13.6%.

The problems didn't stop there. In November 2018, GameStop reported a third-quarter loss of $488.6 million, which led to rumors of a buyout. As a whole, the company lost a record $673 million in 2018. A few months later, GameStop announced it was no longer pursuing a buyer, and the company's stock dropped to its lowest value in 15 years.

2019 saw the company hire new CEO George Sherman, who held previous leadership roles at Advance Auto Parts, Best Buy, Target and Home Depot. Before he joined GameStop, Sherman was the CEO for Victra, a retailer for Verizon Wireless products.

After Sherman took over, the shakeup continued, as the company announced it would lay off 50 regional leaders. Finally, it announced the closure of another up to 200 “underperforming” stores worldwide last September. If you live in the United States, it's possible you’ve seen doors closing in your neighborhood.

GameStop has taken action to try and reverse its downward trajectory. In 2019, it announced a new strategy to “reimagine” its stores with a “unique layout and purpose that appeal to gamers.”

“From store concepts that offer competitive sessions in home-grown e-Leagues to locations that sell strictly retro gaming software and hardware, GameStop will pilot the new store concepts in a select market to present something new to players both old and new”, read the announcement at the time. Last September, a store in Oklahoma showed the first fruits of GameStop’s labors, with a video tour of a new GameStop store design that included sofas, televisions with consoles hooked up, and areas to play tabletop games.

It’s a lot to happen to the retailer in a short space of time. Amidst all of the changes, store closures, and financial losses, it’s also a turbulent time to be a GameStop employee. I spoke with multiple employees across different stores to get their take on their working conditions, the mood inside the GameStop machine, and where they think the brand’s future is heading.

Sandra said she knows her store is performing well, so it was particularly hard to deal with the constant questions around store closures. “I read the news and finances but my whole staff doesn’t, so for a lot of them this caused a lot of anxiety and stress.”

“So imagine morale during holiday, our busiest time, if people asked you every day if you would have a job tomorrow, despite knowing your lease is fine and your store is fine. Or worse, being in the minority of stores who weren’t.”

I was told by some employees that GameStop corporate has made attempts to alleviate concerns. Specifically, multiple employees said they were told that only stores in close proximity to other stores in the same area would be closed.

But at some locations, I was told by employees that corporate had taken a more defensive stance. Instead of alleviating concerns, it had instead put the onus on staff to turn things around, demanding more work and better results.

A New Push for Smartphone Trade-Ins

Specifically, every current employee that I asked said that the current focus is smartphone and technology trade-ins, and the policy is being heavily enforced by newly-hired management. “Many of us lost bosses and peers and had them replaced with more competitive and less empathetic leadership,” said one manager — we'll call him Peter — who has been with the company for 14 years. 

“Many of us lost bosses and peers and had them replaced with more competitive and less empathetic leadership”

This focus is obvious from a consumer standpoint. I recently called my local GameStop and was greeted with, “this is GameStop, where we give you cash for your old smartphones. How can I help you?” The smartphone trade offer is also prominently featured on GameStop's trade offers page.

Employees said they face extreme pressure to meet specific goals for smartphone trade-ins. The goals I heard varied from getting seven trade-ins throughout the week to five to 10 trade-ins on a single Saturday, depending on the store.

One employee who left GameStop recently said they were told their store wasn't meeting those goals, so their store manager received coaching from the regional manager.

Employees heard that their store manager's job was at risk if the coaching did not lead to a rise in trade-in numbers.

These stories have trickled down through more than one GameStop location, with Natalie telling me, “we heard about someone getting fired for not getting enough phone trades.”

The pressure to convince people to trade in their phones has made some employees uncomfortable. “The tactics, especially the tech trades and PowerUp rewards memberships, feel we're shoving it down people's throats,” one employee we'll call Jack said. 

“The tactics, especially the tech trades and PowerUp rewards memberships, feel we're shoving it down people's throats”

There’s also a general skepticism around its effectiveness. “It's not [working], at least in my district,” one long-time employee said, who we'll call Victor. “Most of us are really struggling to get trades in.”

Victor told me that an assistant store leader bragged about trading in their own phone in order to reach the required number of tech trades for the week.  “It's actually quite sad,” he said.

Many employees said that a sudden laser-pointed focus from upper management is merely history repeating. “Our very big, 'nothing-else-matters' focuses come and go every year,” Peter said, “sometimes even more frequently than that.

” Those who shop at GameStop are probably familiar with store associates constantly pushing preorders, upgrades, Pro memberships, Game Informer subscriptions, and so on.

The tech trade initiative is simply the latest thing, another means towards raking in instant, unsustainable short-term profit.

Where Do Employees Think GameStop is Heading?

Employees I spoke to generally don't feel great about the future of GameStop.

Throughout our interviews, they frequently referenced retailers that are long-gone, Radio Shack, Hollywood Video, and, of course, Blockbuster.

“Let's look at Blockbuster and Hollywood Video, for example,” Jack said. “Good things don’t last forever, and those two companies are just prime examples of what happens when the times change.”

“Corporate is clearly struggling against digital game sales, and I've seen it firsthand in the store,” Victor said. “[GameStop] is clearly on its way out, down a painful route.”

It’s not all doom and gloom. Many feel the impending release of the PlayStation 5 and Xbox Series X this holiday season could turn GameStop’s successes around.

“[The next-gen launch] is very important due to the fact that profit has been on the steady decline since the holiday boom ended, and the 'dry season' begins until August or September,” Victor said. “I'm sure they're hoping it'll stabilize what is clearly turning into a turbulent year. “

Other employees don't think next-gen is the only life raft for GameStop, citing the upcoming experimental social stores in its long-term survival plans.

“I wish they would set up more stores that sooner,” one employee, who we can call Sally, said. “At least at my store, we get a handful of regulars that just kind of hang out in the store for an hour or two. So it'd be nice for them to have something to do.”

That GameStop is experimenting with new ideas instead of retreading old ground was generally embraced among the employees I spoke to. “I think a lot comes down to ability and willingness to evolve,” Sandra said.

“We have a new CEO who is more aggressive than any of the leadership for the past decade-plus has been. They’re examining every inch of the business and making hard decisions. I think he has a vision in mind.

Sandra added that the company has a leadership meeting in a few months, where she anticipates the mindset and goals will become clearer.

And despite the uncertain future, many employees I spoke to stressed how much they still love working with their teams, and are ready to face the future of GameStop together.

“I love working at GameStop, I love my team and the regulars especially,” Jack said. “I’ve wanted to work at GameStop since I was 15 years old when we used to do midnight launches for the new Call of Duty. What I don’t love is corporate.”

Reached for comment on this story, GameStop’s corporate office provided the following statement:

“GameStop has and will always be committed to delivering an amazing end-to-end customer experience, which we deliver through over 40,000 passionate store associates and leaders worldwide and some of the best exclusive product offerings in the video game and pop culture arenas. As the video game industry is evolving, so are we. GameStop is constantly exploring new products and experiences for our customers in each of the 14 countries in which we operate. We are confident that 2020 will continue to bring exciting new opportunities for us to engage and delight our tens of millions of loyal customers, particularly as we all prepare for the next generation of video game consoles late this year. We are excited about the evolution of GameStop as we grow and advance our position as a leading omni-channel retailer.”

Note: Portions of these interviews were edited for clarity and to maintain employee anonymity.

Logan Plant is a News writer and Production Assistant for Nintendo Voice Chat at IGN. Follow him on .


A Dying Breed: The Slow But Certain Death Of GameStop

Digital death: Are GameStop, Blockbuster going down in identical dust?

For a brick and mortar retailer with the slogan “Power to the players,” GameStop is ironically facing a crisis of ever-diminishing energy.

The juice (and morale in its staff) have all but worn thin, and gamers? They've moved on to far more powerful, impactful, and sustainable enterprises that give them a reason to stay; a far more reasonable value than a $10 estimate on a used game bought new no less than a month prior.

Now GameStop finds itself in the very same shoes of its used games catalog and not even five dollars seems a worthy appraisal. Break out those shovels, because although some believe video game stores aren't dying, GameStop most definitely is.

The Digitization of Next-Generation

Via Sony

Before even understanding the massive hole GameStop is currently in, one first must understand the now-evolving ecosystems in the video game industry.

Two rather burgeoning aspects of gaming, both of which are still somewhat in their infancy, are now becoming more and more prevalent, especially on the cusp of a new generation of hardware.

A pandemic-fueled quarantine-based contemporary atmosphere has wise aided these soon-to-be thriving facets in the industry: digital-only platforms and cloud gaming.

It may sound rather unbelievable, due in large part to video game collectors, but physical games are going by the wayside.

Microsoft's all-digital Xbox One S and its forthcoming next-gen Project Lockhart are proof of this, not to mention Sony's own diskless and cheaper PlayStation 5.

The advent of cloud gaming has also aided in the death of brick and mortar stores as a whole, given that services Stadia, GeForce Now, xCloud, PS Now, Vortex, and Shadow Tech all do away with disks, not to mention that hunk of plastic, metal, and gaudy wires.

This relatively newly-born Wi-Fi-based gaming setup allows players to leap into most of their favorite games without the necessity of a download, more often than not all through the processing power of a user's phone, or another applicable device.

While it is still in its early years (looking at you Stadia), and the broadening of home Wi-Fi capabilities will most definitely need to be upgraded on an international scale, cloud gaming is very much alive and easily accessible.

Whereas walking into any GameStop or even buying products on their website is filled with over-priced items, an experience which is only hampered by a hounding of unnecessary additional products no one ever wants (or needs).

“But, what about the games not available on those services,” I hear you ask. Two words: Game Pass.

A New Age of Nostalgic Playback

Rolling into the next-gen future, Microsoft is consistently proving itself a valiant competitor, not to Sony or even Nintendo as some might believe, but to (as Phil Spencer has previously mentioned) Amazon and Google. Why is that? Because the Xbox ecosystem isn't just a big black next-gen platform. Xbox content is available even on PC, believe it or not.

Herein lies the beauty of Game Pass, a subscription-based service that does away with old game disks and instead allows fans to download and play their favorite experiences as easily as pressing a button.

The list is ever-evolving, and while the PC database may only be a little over 100-strong, there are hours-worth of insanely awesome content, (at the time of writing) The Outer Worlds, Alan Wake, Rage 2, A Plague Tale, Alien Isolation, nearly every single Halo and Gears game, and so, so much more.

PlayStation Now, as previously mentioned among cloud services, works a bit differently in that players don't download the games, they are played via Wi-Fi. Thus, the service is often looked down upon, but the same principle is still there: nostalgia at a user's fingertips.

Game Pass may do it better, but both systems are far more reliable and accessible than GameStop can ever possibly attempt to be, thereby making one of the only reasons for the store's continued existence now null and void.

Would you rather spend five dollars a month on Game Pass for 100+ games, or buy one used physical copy at GameStop for at least twice that price? Even with clearance sales and a Pro membership, it simply doesn't make sense.

Ever-Depecriating Enterprise Value

In an article under Seeking Alpha titled “GameStop: On Its Way To Liquidation,” the author kicks off the depressing news first and foremost:

“In the last five years, GameStop has lost more than 90% of its value and the company is currently in the middle of reorganizing itself. While the upcoming release of the next generation of consoles later this year might boost GameStop's sales, it's unly that the company's stock will be able to pick up momentum and appreciate from the current lows.”

Staying open amid the pandemic helped to bring about an influx in sales through the help of releases,  Doom Eternal and Animal Crossing, but it didn't provide aid in the PR department. Though already well known, GameStop is a hive of scum and villainy now on its slow descent into self-destruction and total liquidation.

Karma always catches up, and so too do years and years of failing to adapt to an ever-evolving industry, which had quickly moved into a more digital age. Now, GameStop is left with nothing more than a blanket of stores across the globe filled to the brim with games and collectibles that no one wants or really even needs.

Via Seeking Alpha

The article presses the matter even further, claiming that GameStop's dwindling enterprise value, coupled with a negative price-earnings ratio, means the company is on a spiraling nose-dive into utter damnation.

As mentioned previously, left with all but real estate, itself seemingly diminishing with 320 store closures recently and many more expected on the near-horizon, GameStop struggles for air as the soil continues to pile on top of it.

Next-Gen Platform Non-Profitization

So, will GameStop survive the coronavirus? It's not very ly. With ever-rising cases in many parts of the US, not to mention the threat of an even worse wave due in the colder Fall season, store-closures and quarantine could be yet another inevitability.

Thus, while the online GameStop site may still be of some use to the company, it's highly doubtful that the storefront will be able to reclaim its prior footing through the aid of next-gen console and game sales.

Liquidizing storefronts could potentially save the business, but many quick fixes in its past, GameStop will most assuredly squander every available option.

Even collectibles, a product introduced into GameStop stores no less than three years prior to help kickstart its diminishing value, has not and most certainly will not help the company – although, a Johnny Silverhand replica arm display does look pretty sick. Still, many of its long-time customers and even the reliable investors, GameStop is most assuredly headed out the door by year's end. And, many of those still loyal to the brand and its atmosphere, I too will miss midnight game releases.

Yet, then again, my game will already be preloaded onto my system and immediately playable at the stroke of midnight. As for GameStop? It's headed to the grave.

NEXT: GameStop Employees Are People Too

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