In what is perhaps another sign of the decline of the retail age, GameStop, the largest videogame retailer in the world, announced new plans to scale back on its gaming operations in order to focus more on mobile and Apple devices.
The announcement was made at GameStop’s 2014 Investor Day yesterday by CEO Paul Raines. Calling it GameStop 3.0, Raines touted the new initiative as a way to further extend the company’s lifespan by expanding into “gaming-adjacent” fields. Although GameStop already buys back smartphones and tablets at its gaming stores, the company is seeking to prioritize this in its other standalone chains.
The GameStop 3.0 plan entails shuttering 2 percent of GameStop’s retail stores in the U.S., which is roughly 120 to 130 stores, while at the same time expanding the number of stores of several mobile and Apple product retailers under its ownership. The company currently operates 6457 stores around the world.
This includes over 200 Spring Mobile stores, a chain GameStop bought last year that deals in AT&T products, 20-25 Simply Mac stores, an authorized Apple retailer that operates in smaller cities that Apple has no presence in, and 100-150 Cricket stores, another AT&T wireless brand that deals in prepaid mobile phones.
GameStop, according to Raines, is the third-largest and fastest growing AT&T retailer in the States, and that each one of its three acquired brands has the potential to become $1 billion businesses.
Raines cited the success of other companies that followed similar strategies as proof of the plan’s viability. These included Williams-Sonoma, a kitchen equipment retailer that acquired Pottery Barn and West Elm, two home decor companies, and VF Corporation, an underwear company that now owns Lee, Timberland, Wrangler and backpacking company Jansport.
GameStop is planning on using its 27 million Power-Up loyalty customers as a way to grow its newly acquired stores by emailing them about store openings in their area.
In recent years, GameStop has endured a number of controversies with its business practices. These include low employee satisfaction, with CEO Raines’s 40% approval rating on Glassdoor, its practice of opening copies of Deus Ex: Human Revolution to remove coupons for OnLive, and its aggressive promotion of its used games market, which many game developers and publishers have decried as taking all profits away from the people that make games.
The increasing popularity of digital distribution clients, such as Steam, which regularly sells games cheaper than in retail stores and often at huge discounts, is another challenge that GameStop has few, if any, solutions to.