GameStop Shuttering US Stores, Unveiling Closure Plan

GameStop's Silent Store Closures Spark Concern

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

The world's largest physical video game retailer, GameStop (formerly Babbage's), boasts a 44-year history. Founded in 1980 with backing from Ross Perot, it reached its zenith in 2015, operating over 6,000 stores globally and generating $9 billion in annual sales. However, the shift to digital game sales over the past nine years has significantly impacted its performance. By February 2024, ScrapeHero data indicated a nearly one-third reduction in physical stores, leaving approximately 3,000 locations in the US.

Following a December 2024 SEC filing hinting at further closures, a wave of reports emerged on Twitter and Reddit from both customers and employees. One Twitter user expressed disappointment over the closure of a seemingly thriving local store, fearing this foreshadows the fate of less profitable locations. Employee accounts also surfaced, including complaints about unrealistic targets from upper management as store closures are assessed.

The Ongoing Decline of GameStop's Physical Presence

The recent closures continue a worrying trend for the struggling retailer. A March 2024 Reuters report predicted a bleak outlook, citing a 287-store closure in the previous year following a nearly 20% (approximately $432 million) revenue drop in the fourth quarter of 2023 compared to 2022.

Various strategies have been implemented to revitalize GameStop, including diversification into toys, apparel, phone trade-ins, and trading card grading, to counter the shift to online game purchases. The company also benefited from a surge of support in 2021 from Reddit investors, a phenomenon documented in the Netflix documentary Eat the Rich: The GameStop Saga and the film Dumb Money. Despite these efforts, the ongoing store closures remain a significant challenge.