Although it may seem like game sales are stronger than they have ever been, that isn’t true for the entire games retail industry. This week, GameStop announced plans to close 150 locations around the world, citing lackluster sales during Holiday 2016 as a contributing factor.
Of course, GameStop wants to stress that the closure of these stores is a byproduct of its “annual strategy” to shut down locations that haven’t been preforming as strongly as others. According to the company, the closures will be peppered throughout 2017, as GameStop decides which stores meet the mold of “non-productive.”
As far as GameStop’s own Q4 2016 is concerned, both hardware sales and software sales were down. That’s not entirely unexpected for the hardware side given that we’re getting further and further away from the launches of the PS4 and Xbox One, but some might argue that hardware should have been up. Both Sony and Microsoft introduced 4K, HDR-capable consoles last year, which by all accounts seem to be popular.
On the software side, GameStop claims that weak sales for certain AAA titles pushed those numbers down. Again, it’s important to mention that sales might have been down for hard copies, but many of the AAA titles released in fall 2016 did just fine overall, they simply were split more among retailers and digital has become a more enticing option for gamers. Call of Duty: Infinite Warfare, for example, continued the series annual dominance by nabbing the best selling game title yet again and was the best-selling digital game of 2016.
Competition from other retailers was also strong, according to GameStop, with major companies like Amazon, Best Buy, and Wal-Mart making big pushes during Black Friday and beyond. No doubt, it’s a great time to be a gamer, as retailers are regularly offering enticing sales and pre-order incentives, but for individual retailers the competition continues to grow.
Where GameStop used to have the clout of name recognition, now it is price and ease of use that help push consumers one way or the other. And it’s likely for those reasons that GameStop is focusing on the stores that are productive, and shuttering those that are not. At the same time, GameStop has tried to stress that it isn’t forcing sales on any stores, as indicated by the dissolution of the Circle of Life program, which evaluated stores and employees based largely on pre-owned sales.
That being said, it isn’t all bad news for GameStop, who is planning to open close to 100 new locations in the collectibles and technology brands categories. Unfortunately for gamers, these stores will be focused on industries like mobile phone sales.