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OPINION: What game is GameStop playing?

Michael French
OPINION: What game is GameStop playing?

Speak to any analyst, and they’ll describe – whether politely or not – retail as a market in perpetual decline. The most colourful line recently: ‘dinosaurs thrashing about in the tar’.

And yes, with physical retailers’ heavy products, shelves to put them on, meat-space customer service staff to sell you things and receipts to record transactions on, you can easily buy into the metaphor.

There’s little out there to dispel those myths in games. Credit insurance ghouls haunt GAME and HMV; margins are deteriorating; a new console release last week only kept the market flat, with no growth.

So what, then, would GameStop want by – as speculation suggests – buying its way back into markets where it isn’t a leader?

Well, to buy its way back into markets where it isn’t a leader, of course.

While GameStop has been publily cool on bricks and mortar when talking to investors and media like me, it surely sees the opportunity.

Yes, it is preparing for the online future after streaming and cloud games technology acquisitions, and selling more digital content – but an extra retail base allows it to do those things more effectively, plus get a bigger share in the still-breathing boxed market.  

But those Aussie stores are the real problem here – GameStop already owns over 350 Oz outlets. It doesn’t want another hundred in locations where it already operates stores metres away.

No doubt, GameStop has watched GAME Group balance how GAME vs GameStation work as closely as the rest of us. It’s a tricky balancing act, to say the least – and just one of the many complications in GAME’s business GameStop won’t want repeated in its own.

AND THEN THERE’S THE USED GAMES PROBLEM

At the supplier summit GAME hosted last week, I understand one brave soul raised a hand and suggested sharing pre-owned revenues might help boost the chain’s stature and please its partners.

Would GAME consider it? I’m not sure. But I am sure I know who wouldn’t consider it: GameStop.

It has driven the used model to its limit in the markets where it does rule, and has now turned that pre-owned eye onto objet du jour, tablets. GameStop is not a firm that built its business on just giving up on making money – and you can bet it would drive pre-owned even harder in the UK if it came over here.

So those hoping GameStop’s alleged designs on Europe come true might want to be careful what they wish for.

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Tags: GAME , Retail , video games , acquisition , gamestop

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