GameStop 3.0 Announced, 120 Stores ClosingJon Ledford |
GameStop announced it will be closing 120 of its stores, but also proved that it is definitely here to stay.
GameIndustry International reports that one of the biggest retailers in the gaming industry is planning to close up over 120 game stores while doubling its number of Spring Mobile and Simply Mac locations, which it acquired in late 2013. Spring Mobile is an authorized AT&T cellphone/mobile device retailer and Simply Mac is Apple product retailer.
Diverting a tiny bit of its resources from physical gaming retail stores to digital game offerings (via the GameStop website and its Steam-like application), while focusing on the mobile market is what CEO Paul Raines has dubbed "GameStop 3.0." Since the company originally made the bulk of its money by buying used games and selling them back at significantly higher rates, GameStop stores originally started to do the same thing for Apple devices. This eventually segued into the company's interests in stand-alone retail stores to do the same, as with Spring Mobile and Simply Mac.
This can also be interpreted as a sign of the times, especially given the rise of digital downloads. In particular, the Xbox One and PlayStation 4's launches each have resulted in a significant increase in digital downloads, which GameStop cannot directly profit from. As a result, GameStop has decided to close roughly 120-130 of its 6,457 gaming retail locations by the end of the year.
While 120 stores does seem like a lot, it is a small sacrifice compared to what they will gain by adding 200-250 Spring Mobile stores, 20-25 Simply Mac Stores and 100-150 Cricket locations (which GameStop also operates). The digital market may have hurt retail stores specializing in video games, but GameStop is still far ahead of the curve and is planning for the future.