GameStop Shuttering US Stores Amidst Financial Woes

GameStop's Silent Store Closures Spark Concern

GameStop is quietly shutting down numerous US stores, leaving both customers and employees reeling. The closures represent a significant decline for the once-dominant retailer, with nearly a third of its physical locations disappearing. Social media is buzzing with reports from affected customers and employees, painting a worrying picture of the company's future.

The world's largest brick-and-mortar video game retailer, GameStop boasts a history stretching back over 44 years, originating as Babbage's. Its initial store opened in a Dallas suburb in 1980, backed by Ross Perot. By 2015, GameStop reached its zenith, operating over 6,000 stores globally and generating approximately $9 billion in annual sales. However, the shift to digital game sales over the past nine years has significantly impacted the company. As of February 2024, ScrapeHero data indicates a nearly one-third reduction in physical stores, leaving roughly 3,000 locations in the US.

Following a December 2024 SEC filing hinting at further store closures, a wave of reports from disgruntled customers and employees flooded social media platforms like Twitter and Reddit. One Twitter user, @one-big-boss, mourned the loss of his preferred GameStop, citing its affordability and popularity as evidence of the troubling trend. Employees have also voiced concerns, with one Canadian employee citing "ridiculous goals" imposed by upper management as stores face closure evaluations.

The Ongoing Decline of GameStop

The recent spate of closures reflects GameStop's continued struggles. A March 2024 Reuters report predicted a grim outlook, highlighting the closure of 287 stores in the preceding year. This followed a nearly 20% revenue drop ($432 million) in the fourth quarter of 2023 compared to the same period in 2022.

Over the years, various rescue plans have been attempted, both internally and externally. To combat the shift to online gaming, GameStop has explored diverse strategies, including expanding into related merchandise (toys, apparel), and venturing into unrelated sectors like phone trade-ins and trading card grading. The company also received a temporary boost in 2021 from Reddit's amateur investor community, a phenomenon documented in Netflix's "Eat the Rich: The GameStop Saga" and the film "Dumb Money."