GameStop – A casualty of digitialization? – Technology and Operations Management

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Gamestop trade in reached the world

Postby Kazicage В» 27.11.2018

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Remember Me. Digitalization headwinds, however, seem to be driving the complex animal to extinction. GameStop Corp. GME has found itself in a slowly tightening vice, squeezed by secular trends in digital transformation. Growing e-commerce, a shift towards mobile gaming and a transformation to digital game downloading are all emerging as formidable threats to the business and leave the Company very few options to adapt.

Everything that GME sells in its brick and mortar footprint is now available online and many businesses have optimized this business better than GameStop has done with their online offering, notably Amazon. In this context, the growth in e-commerce represents a threat to GameStop going forward as it struggles to compete in that arena.

A decade ago, GameStop could not have envisioned another major threat to its business-mobile gaming. Mobile gaming revenues are poised to surpass console and PC games in for the first year ever 8. The overall gaming market is growing 8. So why is the company in dire straits if it can manage e-commerce and mobile changes?

Far worse than these for GameStop is the existential threat posed by digital game downloading. With widespread internet connections and faster internet speeds, consumers are increasingly able to download games straight to their computers or consoles rather than visiting a GameStop.

The movement to digital downloading is likely to continue given rising internet speeds affect of shortening download times, a frequent complaint of consumers. Even worse, many games now allow early downloading, so that the game becomes available simultaneously with a new games physical release An additional threat is that game makers have transitioned to selling expansion packs and add-ons online rather than selling them physically.

Ultimately this is not a market that GameStop will have access to and the game makers are more than happy to have a D2C platform that they can more profitably sell through. GameStop has not been idle in trying to combat these trends, but it is relying on a few old tricks that might not be sustainable.

The Company has aggressively built out a new segment in aftermarket sales of mobile hardware. In , GameStop aims to add to technology branded stores under Simply Mac or Spring Mobile banners to participate in this reseller business 1. It has also gotten into the refurbishment business for FitBit products as it aims to stay relevant in hardware. The Company is also aiming to be nimble in its video game store footprint, closing underperforming locations in to boost profitability 3.

More importantly, it provides a source of income for customers to purchase new games and it generates foot traffic into its retail locations since customers have to physically trade-in game discs 6. Both Microsoft and Sony have flirted with totally eliminating physical game discs and GameStop has pushed back so that at present GameStop can retain this business.

Since the console makers and game makers see no additional revenue from this secondary market, it remains unclear how feasible this business will be in the long-term.

As much as possible, GameStop has to aim to keep this market and grow with digital game downloading. A radical option that the company should employ is including console manufacturers and game makers in their resale profits as a way to keep physical sales.

Overall, management should realize that they will- in all likelihood — be the next Blockbuster and the best use of their cash is not to reinvest in new businesses or advertising as a way to drive store traffic, but rather they should optimize cash flow and aim to return as much profit to shareholders as possible before they ultimately have to shutter their doors.

Well met, Paul. It is clear that GameStop has been able to survive an industry-wide secular decline in large part due to the monopoly it has enjoyed in the secondary market for video games. With that said; however, it is unclear to me whether GameStop will inexorably go the way of Blockbuster.

One can also see certain parallels with what GameStop is facing today and what Netflix was facing not too long ago. In , Netflix found itself at a critical juncture when its original DVD movie rental business was increasingly transitioning to a digital streaming model. As we now know, Netflix was able to evolve its business model to not only provide streaming, but also create its own content. In an attempt to diversify from its core brick-and-mortar business of buying and reselling used video games, the company launched in an in-house publishing label called GameTrust.

If GameStop can find a way to evolve and make itself relevant, there may still be plenty of life left in the years to come. Wow, the future of GameStop certainly looks bleak. But others, such as Runescape, which is played completely in the browser with no download required. I think this is even more likely to happen in light of increasing broadband speeds worldwide. As you mentioned, they claim a 30 percent to 40 percent market share in the sale of digitally licensed content.

Their employees are deeply knowledgeable about the different products and titles, and their customers. Because of this, I believe there will be a used market for some time that will allow GameStop to maintain the levels of traffic it has been receiving, and enable the company to survive. Because of the shift to more social gaming, it is extremely important to game producers that people continue to play their game for a long time.

Without players, these hyper social games lose their allure. A used market allows additional players access to the game universe, without the producer needing to drop the price of their game for those who want the convenience of digital downloading. Said another way, GameStop is enabling the longevity of a game by allowing price discrimination. I agree with the post that the road ahead for GameStop is tough and does not look bright. That being said, the article does not mention a valuable asset that the company does have — its brand.

For gamers, GameStop is often synonymous as the destination to purchase games, even if that is less true today than it was ten years ago. With that in mind, is a possible solution to extend the GameStop destination and brand to online?

By extending across game makers, it has the advantage of being a one stop shop for gamers, something that its brand already signals. While it will likely require new revenue sharing schemes for the game makers to agree, I do think that this could be a possible solution as it looks to take advantage of the digital trend in the gaming industry. There is a lot of money and opportunities in this relatively young category.

The company has 6, stores in operation and the company should consider taking advantage of this real estate to host practices and competitions for gamers to develop their talents 2. And, this increased traffic and captive audience would likely purchase other products as well. Just as Petco started offering grooming services to its consumers to drive traffic and repeat, subscription like purchases, GameStop could consider adding video game lessons and tournaments as well.

Greetings, Paul. It is worth noting, however, that GameStop does not own any titles as in the case of XBOX and Sony, and therefore may not be able to compete with the virtual stores operated directly by game developers. In addition to negotiating revenue sharing schemes with incumbent game makers, Gamestop could also consider 1 identifying and acquiring game development and exclusive content release rights for selected future titles i.

Great analysis on the demise of the traditional GameStop business model. I would not be surprised if they shutter most retail stores in favor of the new digital models assuming they survive the transition.

One under-emphasized points transforming gaming is the concept of in-app purchases. In-app purchases are gaming content add-ons for purchase to enhance the base game experience the price of the base game sometimes being free.

The new content can include extra levels, more features, or purely cosmetic alterations a more interesting looking weapon or uniform in a multiplayer game, with no additional gameplay functionality.

While the in-app purchase practice is still undergoing controversial changes, at the very least we know it moves many of the economics out of the hands of the video game distributor and back to a direct communication channel between the game publisher and game player. An alternative can be subscription based gaming company. Their core business after all is to sell rights to reproduce games. I have difficulty believing that GME will keep all of their brick and mortar stores.

Possible the best performing ones can be transformed to testing places for their game offering. New technologies such as more immersive games, augmented reality, virtual reality and wearable games include a hardware aspect that can be explioted by GME.

Blockbuster is a company that just watched this digitalization and disruptive change happen around them without adapting to the shifting trends. GameStop, I believe, is not yet in that desperate a territory and still has time to adapt if they choose to.

I agree with the posts above that the company could leverage itself as an online gaming marketplace both on PC and game consoles. In order to do this they would likely need to share profits with the gaming companies but would relieve those companies of the need to manage, update, and maintain the marketplace for buying video games. The gaming companies would have to agree to let GameStop take a percentage of the game revenue in exchange for their marketplace.

You must be logged in to post a comment. Register for an account. Skip to content. We manage this forum to gather and share perspectives from the HBS student community. Want to learn more about digital transformation? Assignment: Digitization Challenge.

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SELLING IPHONE XS MAX TO GAMESTOP!! (RELEASE DAY), time: 10:20
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Re: gamestop trade in reached the world

Postby Malalar В» 27.11.2018

Sherman's plan is straightforward, and he broke it down into three main points during the June investor call:. So why is the company in dire straits if it can manage e-commerce download best games for ppsspp mobile changes? While the in-app purchase practice is still undergoing controversial changes, at the very least we know click moves many of the economics out of the hands of the video game distributor and back to a direct communication channel between the game publisher and game player. Basic loss earnings per share.

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Re: gamestop trade in reached the world

Postby Gardarn В» 27.11.2018

Just as Petco started offering grooming services to its consumers to drive traffic and repeat, subscription like purchases, GameStop could consider adding video game lessons and tournaments as well. Access feached latest information and news concerning GameStop's strategic initiatives across its family of specialty retail brands. World globe An icon of the world globe, indicating different international options.

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Re: gamestop trade in reached the world

Postby Mikashakar В» 27.11.2018

It's been in steady decline ever since, however, as its C-suite reshuffled and a new CEO was appointed: George Sherman. Contact GameStop Corp. Great analysis on the demise of the traditional GameStop business model. Accrued and other current liabilities.

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Re: gamestop trade in reached the world

Postby Arashigrel В» 27.11.2018

It often indicates a user profile. November 20, EmilyS says:. November 20, J B says:.

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Re: gamestop trade in reached the world

Postby Tygobar В» 27.11.2018

GameStop also offers fans a wide variety of POP! Condensed Consolidated Statements of Operations in millions, except per share data unaudited. With that in mind, is a possible solution to extend the GameStop destination and brand to trqde The Company has aggressively built visit web page a new segment in aftermarket sales of mobile hardware. August 3,

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Re: gamestop trade in reached the world

Postby Kesar В» 27.11.2018

Possible the best performing ones can be transformed to testing places for their game offering. Sherman's past is varied, but a common thread runs through it all: executive leadership. Our definition and calculation of non-GAAP financial measures may differ from that of other companies. As we now know, Netflix was read article to evolve its business model to not only provide streaming, but also create its own content. On top of that, and even worse for GameStop, is that many of the games in those digital storefronts aren't sold in stores at all.

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Re: gamestop trade in reached the world

Postby Kazralkree В» 27.11.2018

un is facing massive trade to its core business model: selling used games. Just as Petco the offering grooming services to its consumers to drive traffic reached repeat, subscription like purchases, GameStop could consider adding video game lessons and tournaments as well. In an attempt to diversify from its core brick-and-mortar business of buying and reselling used video games, the company launched in an in-house publishing label called GameTrust. Our definition and calculation of world financial measures may differ from that of other companies. GameStop launches the Rwached Rewards customer loyalty program; secures more than 10 million members within the first year.

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Re: gamestop trade in reached the world

Postby Bralabar В» 27.11.2018

Tradee icon An icon in the shape of a person's head and shoulders. For gamers, GameStop is often synonymous as the destination to purchase games, even if that is less true today than it was ten years ago. Those lower prices aren't attached to new games but rather to used games: If you're willing to put up with an open box, you can often buy a relatively new game for less money at GameStop.

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Re: gamestop trade in reached the world

Postby Yohn В» 27.11.2018

Other long-term liabilities. I think this is even more likely to happen in light of increasing broadband speeds worldwide. An additional threat is that game makers have transitioned to selling expansion packs tge add-ons online rather than selling them physically. Our History. Careers GameStop hires source best and brightest talent to manage and grow our family of specialty retail brands.

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Re: gamestop trade in reached the world

Postby Nek В» 27.11.2018

November 20, Rexxar says:. This, generally speaking, is the crux of Sherman's "GameStop Reboot" plan. Great analysis on the demise of the traditional GameStop business model.

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Re: gamestop trade in reached the world

Postby Yozshukus В» 27.11.2018

Basic loss earnings per share. Percentage of Net Sales:. Net Sales in millions :. Current liabilities:.

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Re: gamestop trade in reached the world

Postby Arashimi В» 27.11.2018

Dan joined EB Games in Download PDF Adjusted operating loss earnings.

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Re: gamestop trade in reached the world

Postby Shanos В» 27.11.2018

Http://gamers-gold.fun/play-online/play-pokemon-online-1.php Subscribe. Number of shares used in adjusted calculation. Because of this, I believe there will be a used market for some time that will allow GameStop to maintain the levels of traffic it has been receiving, and enable the company to survive.

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Re: gamestop trade in reached the world

Postby Ker В» 27.11.2018

We believe these non-GAAP financial measures provide useful information to investors in evaluating our core operating performance across reporting periods by excluding items we do not believe are indicative of our core business or affect comparability. Dan joined EB Games in For gamers, GameStop is often synonymous as the destination trafe purchase games, even if that is less true today than it was ten years ago. August 3,

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Re: gamestop trade in reached the world

Postby Vukree В» 27.11.2018

Following graduation, Jim served as a Naval Flight Officer more info squadron and flight operations in the U. The second component of Sherman's plan revolves around "optimizing the current business," and he's begun hinting at what that could mean. But the world in which Sam Goody and Tower Records did good business selling music and movies on physical media read: discs is long gone — just like games board spirit play companies. Newsroom Access the latest grade and news concerning GameStop's strategic initiatives across its family of specialty retail brands. November 20, MW says:.

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