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It wasn’t that long ago, so most everyone probably remembers the Reddit fueled Wall Street battle for GameStop that happened earlier this year. Thanks to very large number of people trying to bump up the chain’s value, GameStop’s stock value is actually ten times higher right now than it was at the beginning of 2021. One might think this was actually a good thing for the company, having good value after the debacle that was 2020, but unfortunately, this stock increase has very little to do with the actual performance of the business. This is made pretty clear by GameStop’s fourth quarter and 2020 fiscal year results.
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.
About a week ago, GameStop head honchos apparently thought it was a good idea to keep their physical stores open during the Coronavirus outbreak, even in states that required all non-essential retail stores to be closed. According to a memo the guys in charge left for their employees in case they were questioned by government officials, GameStop considers itself essential retail.
It seems that GameStop will soon go the way of Blockbuster: no one needs physical copies of their entertainment anymore. Digital purchases and downloads are simply more convenient and more efficient. GameStop has a slight advantage in the fact that they sell things you do need physical copies of, like controllers and consoles themselves. But there’s no denying that video games were the main source of income for GameStop, and they just aren’t making that money like they used to.
Huge cuts made within GameStop Corporation have affected approximately 14% of the associate base at the company’s headquarters, as well as many of its subsidiaries, such as Game Informer. GameStop Corporation is the parent company of both video game retail chain GameStop and video game magazine Game Informer. Recently, they laid off over 120 of their employees, which constitutes the aforementioned 14% of their associate base at both their headquarters and some of their other offices.