Game Stop To Close Up To 225 Stores
Video game retailer GameStop announced plans to shutter between 150 and 225 of its 7,500 global locations after a 13.6% sales decrease in Q4 2016. A list of the exact locations has not been provided.
GameStop's main problem has been video games sales themselves. New hardware sales declined 29.1% and new software sales declined by 19.3%. The company blames weak sales on sluggish AAA titles and aggressive console promotions from competitors.
The full story is that GameStop and other physical video game retailers have been hard hit by e-commerce. It is hard to get consumers in the store when they are downloading games directly to their console or PC. Game developers and publishers are increasingly cutting out the middleman, selling directly to the consumer. Digital video game sales from online marketplaces like Valve's Steam or EA's Origin are surging, up 10% to $7.5B in January.
The struggles of physical games sales are apparent in GameStop's 2017 strategy, which seeks to move away from video game sales into non-gaming business. GameStop's collectibles sales rose 27.8% in 2016. The company will add 35 new collectibles stores and approximately 65 new Technology Brands stores.