High street video game retailer GameStop announced that it's on track to close between 180 and 200 of its brick and mortar video game stores by the end of 2019, Forbes recently reported. The retail giant, which has over 5,700 stores worldwide, recently held its quarterly earnings meeting with a freshly-appointed management team and the key focus was making GameSpot relevant in the ever-expanding world of digital media.
GameStop CEO George Sherman, who was appointed in April and is the company's fifth leader since 2017, stated that he and his team are "committed to creating a social and cultural hub of gaming."
With the digital video game distribution space already having so many well-established players such as Steam, Xbox Games Store, and PlayStation Store, it seems GameStop will have its work cut out hitting that aspiration. This is especially true when considering the rent it will continue to pay for over 5,500 buildings related to a business model that appears to be dwindling.
Speaking with CNN, Sherman stated that "if you look at the trend of sales over the last several years, selling general administrative costs didn't move with sales. So we had a cost structure we had to address," he said, adding that "we found [it] unpleasant but we needed to do it."
Earlier this week, the company reported that sales had dropped 14.3 percent, bringing its second quarterly earnings down to $1.3 billion. With both Sony and Microsoft teasing their next-generation consoles that are expected to launch next year or so, it's not surprising that sales of both current Xbox and PlayStation models are down, contributing to GameSpot's lower sales figures.
CNN also shared that market research analyst NDP Group has confirmed that sales of physical video games have been dropping steadily for the past 10 years. But some analysts are optimistic that GameStop can make a comeback. SuperData co-founder Joost van Dreunen elaborated on the research.
"GameStop's fate has long been tied to the alleged demise of console gaming. I have no doubt that Microsoft, Sony and Nintendo continue to look to GameStop as an integral part of their marketing and sales strategy over the next few years."As part of the strategy to revamp the brand, GameStop has begun seeking to strike deals with eSports teams and organizations. The announcement hit the internet on the same day that Apple announced its plans for Apple Arcade, along with new its iPhone 11 as reported by The Inquisitr.