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GameStop Is In Talks For A Buyout
It seems like brick and mortar stores are going the way of the dodo, thanks to increasing online competition. That shift towards digital, direct sales has been drastically changing the video game landscape for a few years now, with GameStop, probably one of the most recognizable and most popular video gaming retail outlets and owners of Game Informer magazine, looking for a company to buy it out.
GameStop began its life as Babbages in 1984. When that company merged with Software, Etc., it became Babbages, Etc. But then Barnes & Noble purchased the company in 1999, along with another company called Funco. The two retail outlets merged into what is now known as GameStop. GameStop went on to purchase EB Games, as well as several other smaller companies. It eventually became a gaming retail powerhouse with over 7,000 stores located all over North America.
But times are changing, and players now buy many of their new physical games at online retail stores, such as Amazon, or download them directly from various online outlets, such as the PlayStation Store, Xbox Live and Steam. GameStop continues to offer its trading and used games program, though, which is possibly why it remains afloat, in spite of its troubles.
However, Reuters reports that GameStop is now actively looking for a new buyer for its struggling retail business. The company hired a financial advisor to help it look through offers, including one from Sycamore Partners, a private equity firm. GameStop lost a CEO in May after only three months on the job, although he reportedly left for personal reasons. Over the past year, GameStop stock has gone down over 32 percent. In 2017, the company announced that it had plans to close over 150 stores and expand its business beyond gaming to focus on technology and collectibles.
Even with its used game program, GameStop continues to struggle to keep up with a changing market, thanks to services such as Microsoft's Xbox Game Pass service, which allows users to stream older games for a low price. Sony offers PlayStation Now, which also offers up older titles for the PlayStation console. And now, even some video game publishers have plans to offer gamers streaming services that will allow them to play older titles. The convenience of these services make them no-brainers for consumers, which means that physical retail outlets that offer older games get left out in the cold.
Will GameStop find a new buyer and a new niche to fill to keep it in business? Or will it suffer the same fate as other retail outlets, such as Toys R Us and Blockbuster Video?
