Last Updated on May 31, 2023 by Dave Farquhar
Gamestop, the venerable video game retailer, announced in April 2020 it’s closing 300 stores. Rumors of Gamestop’s demise are rampant, and have been for a long time. Can Gamestop survive?
Changes in the way people buy video games has made life more challenging for Gamestop. I believe the company could survive, but it will have to change its business model and improve its customer service a lot in order to do it.
Challenges for Gamestop
Back when it was called Babbage’s and sold mostly computer software, the store we now call Gamestop was one of my favorite stores. That was a long time ago, of course. In the 80s and 90s, you either bought your software in a retail store, or you bought it from a catalog and waited days or weeks for it to arrive. It didn’t have the best selection or the best prices in the world, but it wasn’t bad. And there was a location in almost every shopping mall, so it was convenient. Convenience meant it didn’t have to be the best.
As game consoles regained popularity, it transformed itself into a console-oriented store. If anything, it became more popular as time wore on because it had a larger audience.
But during the 21st century, digital distribution became a thing. Rather than buy your games at the store, you could buy them straight from your console, the same way we’d grown used to buying music and movies from our phone. Digital distribution is why stores like Blockbuster, Suncoast, Sam Goody, and Musicland closed. Why go to the mall when you can buy it straight from your phone, have a better selection, and get it nearly instantly?
Gamestop needs to change again if it wants to survive. And it has options that stores like Sam Goody and Musicland didn’t.
Selling to gamers when you can’t sell games
The trouble for Gamestop is sustaining itself selling console games. It’s hard to compete with digital distribution, and not only that, other stores sell games too. In the 80s at least, Babbage’s survived because it had a better selection than Best Buy or Target. Today, the difference is narrower. The major difference is Gamestop carries used games that are cheaper.
Gamestop’s opportunity is really in accessories and the systems themselves. Every other store sells systems too. Gamestop sells used systems, which helps. But there’s another opportunity. Sometimes game consoles break. And then what?
Gamestop needs to pursue that market aggressively. They should start doing repairs in-store, or at least at select locations. When repair isn’t straightforward, or in locations where they can’t repair in-store for whatever reason, they should offer an immediate trade for a working console.
Sure, Best Buy does repairs. Gamestop just needs to do it a little faster or a little cheaper, or be a little more convenient. Immediate trade-in for a working system would suffice for the convenience factor.
Offering service on vintage consoles wouldn’t hurt either. There’s plenty of nostalgia for those vintage systems, and most of them have issues now that they’re several decades old. That’s an opportunity for Gamestop. It’s not like any other national chain will fix a broken NES or SNES.
The other thing Gamestop needs to fix to survive
But if Gamestop doesn’t survive, there’s another reason for it. Target and Best Buy aren’t exactly known for great customer service. But their customer service is at least adequate. Gamestop’s has a long way to go before it can be considered adequate.
When I was a kid and went to Babbage’s, the employees certainly were aloof if they didn’t think I was going to buy anything. But if I walked up to the counter with a game in hand, they didn’t ignore me. They treated me like any other paying customer.
When I’ve taken my oldest son to Gamestop, his experience wasn’t nearly as good. Any teenager or adult immediately gets priority over him, even if that person comes into the store after he does, and he’s standing at the counter with money in his hand. If the phone rings, the employee will drag out that phone call just as long as he can. And one time when my son bought something that didn’t work and we came back into the store, the employee had him in tears because he wouldn’t help him. He told him to go home and call Nintendo.
I told the employee that’s what we’d do, and we’d never come back. And we haven’t.
And this isn’t a pattern. No other store treats him like that. I think it stinks that his memory of a store I used to like will be so unpleasant.
If we buy game console stuff from Best Buy or Target and it doesn’t work and I can’t figure it out, I’m not very confident someone at Best Buy or Target will be able to figure it out either. But at least they’ll try.
So can Gamestop survive? Sure.
Will it? I’m not terribly optimistic.
David Farquhar is a computer security professional, entrepreneur, and author. He started his career as a part-time computer technician in 1994, worked his way up to system administrator by 1997, and has specialized in vulnerability management since 2013. He invests in real estate on the side and his hobbies include O gauge trains, baseball cards, and retro computers and video games. A University of Missouri graduate, he holds CISSP and Security+ certifications. He lives in St. Louis with his family.