Recently a report from Reuters leaked the fact that retailer Gamestop was in talks regarding a buyout with investment firms. Today Gamestop confirmed that it is indeed talking with firms about a potential transaction, in their words. A private source has told press that the talks are in response to interest in a buyout from private companies such as Sycamore Partners. However, Gamestop themselves are staying quiet about the talks, revealing no details about them at all.
In 2017 Gamestop had to deal with a major credit card breach in addition to closing 150 stores. The company have also had a tough time with the previous CEO leaving due to medical reasons and sadly passing away soon after, only for their replacement to leave the role three months into the job. Currently former Xbox boss Shane Kim is acting as interim chief while the company finds a more permanent solution.
Gamestop has diversified the products they offer in the past but they’re still heavily dependent on physical game sales. As the digital market steadily grows it’s been taking sales away from physical retailers around the world. Toys R Us and Gameseek are just two of the companies which have closed their doors due to the increase in customer preference for buying games online.
If Gamestop were to agree to a buyout then there’s no telling how the company might change for the future. An investment firm would bring a lot of much needed money to the company, opening a lot of doors for the business moving forward.
UK games retailer GAME has managed to survive by heavily investing in Belong spaces, open game spaces where gamers can come to play together. Over the next few years more and more of these will pop up as part of the partnership GAME has with sports retail giant Sports Direct.
Gamestop might stand a chance in the future as a business if they diversify in a similar way to GAME. With most gamers preferring to download their games at home and then play them at home, it’s hard to tell whether the introduction of more live gaming spaces and events would draw enough customers to make them viable. Only time will tell how Gamestop is going to proceed.