GameStop has joined forces with global innovation design firm R/GA to outline a new strategy to save the waning business. The initiative comes at a time when the video game retailer is enduring a record-breaking slump in sales and reeks of a desperate effort to reverse its unstoppable decline.
In a press release issued yesterday, GameStop outlines how the partnership will redress its chain of physical stores as well as entice customers back with a focus on “immersion, achievement, creativity, and community.”
Research Exposes Struggling Retailer’s Complete Detachment from Customers
According to the release, these four pillars were determined thanks to “qualitative and quantitative research” conducted in tandem by both R/GA and GameStop. In what is a damning indictment of just how detached GameStop is from its customer base, the results of the research appear painfully evident to anyone with an inkling of the current gaming landscape.
“[V]ideo games are no longer just a form of entertainment, but are a fundamental part of the fabric of a modern customer’s life. This consumer believes gaming is the most immersive, most challenging, most creative and most inclusive form of entertainment and vibrant storytelling available, and in many cases is an important facet of their identity.”
With a heavy focus on the retailer’s extensive portfolio of over 4,000 brick and mortar stores in the US alone, the strategy revolves around transforming these into “concept” gaming hubs to offer ”unique in-store experiences.” GameStop hopes to encourage gamers to flock back to its stores through:
“competitive sessions in home-grown e-Leagues to locations that sell strictly retro gaming software and hardware”
Piloting of the concept stores will target a select market, presumably the US. Details of how the pilot will work remain scarce, notably how many stores will “benefit” from the planned facelift.
GameStop’s Paralyzing Decline
The partnership comes at a crucial time for GameStop.
The beleaguered retailer’s stock plummeted over 27% in January, representing a nearly 15-year low as GameStop’s board decided to sideline repeatedly-botched plans to sell the company.
The downward spiral continued as financial results for 2018 published in April marked a $673 million loss. This year looks equally bleak; first-quarter revenue is down 13.3% alongside a staggering net income drop of 75% compared to the same period last year.
Internally, matters are just as shaky. A reshuffle saw long-time GameStop CFO and COO Rob Lloyd leave the sinking ship in May alongside a wider rejigging of the management team.
The Sisyphean tasks of firefighting successive PR shambles and rebuilding trust among disenchanted gamers loom equally large.
Too Little, Too Late
Appealing to gamers after shunning them for years with extortionate prices and questionable business practices is too much to ask at this point. The offer of community hubs has its merits, but this requires the cultural infrastructure and local demand that don’t necessarily exist in most cities with a GameStop store. Banking its future on an unproven concept seems reckless.
From wading through the customary marketing doublespeak of the press release, it’s clear GameStop’s latest efforts to stay afloat sound the death knell for the strained retailer.
The ever-steady pace of retail’s decline means GameStop would need to pull something remarkable out of the bag. On the surface, its latest initiative falls short of ”re-affirming its place in the video gaming culture” and is a textbook example of too little, too late.
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Last modified: September 23, 2020 12:50 PM