GameStop To Close 200 Stores, Revamp Brand Around In-Store Gaming
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The leading brick-and-mortar retailer for video games is sick of being left behind.
Beset by a combination of factors that have decreased its relevance, GameStop announced Tuesday that it will close up to 200 stores by the end of the fiscal year, CNBC reports. It will also be opening prototype stores in Tulsa, Oklahoma, to see if it can turn its fortunes around for the rest of its 5,700 locations.
The concepts that will be tested in Tulsa all point to GameStop leaning into experiential retail, like so many other industries searching for ways to convince customers not to buy products online, Bloomberg reports. In the case of video games, computer or direct-to-console downloads pose just as much of an existential threat as Amazon.
The Tulsa stores will include couches and TV sets, as well as vintage arcade systems, to make the in-store experience more about playing games than selecting them off the shelf, Bloomberg reports. GameStop will also follow the common trend of stocking less in-store merchandise and integrating more with online sales.
The retailer will have miniature stores-within-stores decked out in the branding of the three biggest console makers in the world: Nintendo, Sony and Microsoft, Bloomberg reports. GameStop will also begin focusing on high-end gaming gear, many from private labels.
GameStop will also seek to capitalize on the newer trend of watching games, promising to host esports tournaments at the new stores.
The spectator sport of professional gaming has become big business in a span of just a few years, to the point where the first ground-up arena for an esports team is on the way. But some analysts expressed doubt to Bloomberg that a more casual community space is needed in an industry that spread through online interaction.
GameStop CEO George Sherman said on the company's Q2 earnings call that the company was adjusting its same-store sales projections for the rest of the year to a double-digit decline from last year. The resulting dip in the company's stock represented a 60% drop in the company's value from the start of 2019, CNBC reports.