Over the last few years, its become increasingly apparent that GameStop's chain of stores is in a lot of trouble. Not only has the brand encountered severe financial difficulties, but it also stumbled into mass controversy at the beginning of the COVID-19 pandemic for endangering GameStop employees and creating hazardous work environments.
Recently, the company announced that it would enter a multi-year partnership with Microsoft, hoping to alleviate its bad luck by striking a strategic deal that would benefit both companies. Microsoft offered GameStop its technology, including a cloud-based data storage application that would analyze customer preferences and deliver real-time data, while the store would sell Xbox Series X and S bundles that come complete with a two-year subscription to Game Pass Ultimate.
If the target for the deal was to strike up more business for GameStop, it seems its been a unanimous success, with a new report from Reuters claiming that the store's shares have risen by a whopping 44%. For a company that has recently been spiraling both in terms of revenue and public opinion, that's a huge deal, with many expecting the numbers to rise even higher when the next-generation consoles debut next month. A new console cycle always means bigger sales numbers, after all, especially considering the rate of which the PlayStation 5 and Xbox Series X have already sold out around the world. GameStop stands to have an especially lucrative holiday season, which only benefits the chain of stores following its Q2 losses.
For those out of the loop on company's current financial situation, the retail giant announced in early September that it plans to close over 400 GameStop stores by the end of year due to its revenue being on the decline. It'll be interesting to see whether the new deal and this sharp spike in shares correlates to a second wind for the company, with the next-generation likely being its last chance to stay on its feet.
Many will likely be invested in GameStop's plans for this winter seen as its deal with Microsoft will lead to some fantastic bundles in-store. With Xbox leaning more heavily than ever on its Game Pass membership, having a bundled in subscription to the service will completely strip away the dilemma of forking out extra money on a console's launch lineup. It's a smart move on Microsoft's part, but one that will no doubt help GameStop, as the store can offer a player-friendly bargain that will attract many looking to invest in a Series X this Christmas.
Source: Reuters