The last few years haven't exactly been kind to GameStop. With some major changes in the industry as streaming services begin to take off and the constant threat of online stores with deep discounts, it's difficult for a brick and mortar video game retailer to stay afloat... Even when it comes to one that is a major nationwide franchise.
GameStop isn't going down without a fight though. Despite another year of major loses and tons of GameStop stores closing, the company is looking to rebrand some of their stores and breath fresh life into the chain. The time to make a big move is definitely now, so it makes sense to see the retailer moving forward in a new direction.
Although store redesigns haven't officially rolled out just yet, a leak of a GameStop redesign hit the web earlier this week and offered a first look at what the plans are. GameStop has since confirmed that the video is accurate and that some, but not all, stores will be redesigned in a similar fashion to the leaked video location.
After years of asking "is GameStop is really dying", it's exciting to see the company making some major strategy changes. After reviewing the video and considering the new, more community-space focused approach, there's one big question: Is this enough to save GameStop? There are obviously a lot of factors, but it is an interesting question to explore. GameStop is not going to be able to compete with Amazon in terms of prices or convenience. That's the reality for GameStop as much as it is for local comic shops, board game stores, or even something like Barnes & Noble. So, the best way to maintain profits and get customers to visit stores is to make them a destination.
Putting the focus on community and giving gamers something to do, in addition to shopping, while visiting the store is a trick that has worked for other businesses who are battling against online giants, so it makes sense to see GameStop try to implement these same strategies. The stores have had tournaments and events in the past, but making the location more of a hangout spot could help get customers returning on a more frequent basis. Providing gaming spaces and offering other revenue sources (like food and drinks) seems like a smart move.
Getting bodies into the store is great, but at the end of the day, it only counts if they end up spending money. This will obviously be the real test. The general theory is that communities who spend extended time in a store and with its employees will begin to feel some additional loyalty and be willing to spend a few extra dollars per game or wait a few days for a shipment to come in, rather than going to Amazon for a cheaper price and affordable one-day shipping.
One other factor to consider when assessing GameStop's threats is the streaming future. Although we're still in the early days, services like Xbox Game Pass, Stadia, and Apple Arcade are all trying to get consumers hooked on gaming without actually getting them to purchase physical games. Whether or not a store like GameStop can continue to exist depends a lot on how well the streaming services perform and how much consumers buy in to these subscription services. There will obviously still be the need to buy hardware and other peripherals, but the pre-order business model is going to take a big hit as major AAA titles like Gears of War 5 continue to release on streaming services.
It will be interesting to monitor the success of GameStop over the coming fiscal year and see how the store redesign rollouts go. We'll continue to keep an eye on the stories as they develop and report back on the success or failure of the redesign efforts.