Last Updated on April 1, 2020 by Mark P.
GameStop has claimed that it will close down more than 300 stores this year. However, the game retailer made sure to note that this has nothing to do with COVID-19: this plan was in motion before the pandemic. This announcement was made by Chief Financial Officer Jim Bell during the most recent fiscal earnings call.
More specifically, Bell shared that the physical closures this year will be pretty similar to the closures that occurred during 2019, which was when they closed down roughly 320 physical retail locations. At this exact moment, GameStop operates about 5,500 stores worldwide.
“In fiscal 2020, we will continue in our efforts to de-densify our store base, focused on maximizing product productivity of the entire fleet,” Bell said. “[We] anticipate store closures to be equal to or more than 320 net closures we saw in fiscal 2019 on a global basis. Importantly, we want to emphasize that these store closures are a very specific and proactive part of our de-densification plan and they are not related to recent business trends.”
This isn’t the only time GameStop business practices have been of note lately. A week ago, when local governments first started ordering non-essential retail stores to close down, GameStop kept their doors open, claiming that they were indeed essential retail. Needless to say, this notion was a little ridiculous, but GameStop eventually reversed their sentiment and agreed to close down physical retail locations.
But as said previously, that doesn’t actually have much to do with why GameStop is closing more stores this year: the real reason for that decision has to do with the fading popularity of physical game copies.
Short of collector’s editions that come with special physical bonuses or the few people that enjoy having a big shelf full of game cases, most people are content to buy and download games online, which is a big problem for GameStop, which does most of its business through physical retail.
That said, there are still a few reasons to go to GameStop, including memorabilia, accessories, and hardware, but most of that can be bought online too. That fact is the reason why GameStop is slowly moving towards a more digital selling platform: keeping so many physical locations open at this point is just cutting into their profits.
Still, it’s a bit sad to think of GameStop going the same path as Blockbuster, though it is probably inevitable, all things considered. Physical games just don’t matter as much these days. That said, GameStop does still have plenty of physical stores worldwide, so even if they shut down 300 in 2020, they’ll have quite some time to go before having no physical stores to visit at all.
Then again, if profits really start dropping, the company could start closing down stores at a much faster rate in the years to come. If that does happen, we can say goodbye to buying physical copies from any dedicated retailer, and instead trust that general stores like Walmart will be stocked.