GameStop employees report extreme pressure from ‘desperate’ bosses

Take a look at Waterstones as a good example - if you walk into Waterstones every single employee will be well read, they'll be informed about a large number of the books that are currently popular, and what other books the author writes etc. There'll be book signings, Q&As with local authors, book clubs etc. etc. If I go to my local Waterstones website and search for my local branch I don't just get the location, I get a list of events that are happening at the branch - There's a 9-12 book club on Saturday, there's a Costume & story telling event on Monday (for kids), and an adult book club in the evening on Friday, and an evening with a famous author in collaboration with the local university celebrating International Womens day.

Now take a look at Gamestop - rather than bringing people in to the store, they're driving people away with aggressive upsell tactics. I mean, it's honestly crazy - gamers are an incredibly vibrant community that would love somewhere they could go in real life to meet other fans of the games they love. It's an open goal. Yet gamestop is so committed to a strategy of squeezing the people that do come in to the store that they can't create that environment.

This will sound snide but if a large company finds themselves in a dying industry it’s already too late. Much like how an ocean liner takes time to change direction. If they failed to see an iceberg ahead and try changing course at the last minute they can reduce the damage but it’s already too late.

IMO what Gamestop should have done was get into gaming conferences, tournaments or maybe even digital distribution of games. Now this is way easier said than done since both Steam and Epic’s service launched off the back of a must have once in a decade viral title (Half Life 2 and Fortnite respectively). But Gamestop could have certainly tried. They could have partnered with EA’s limping Origin service or Ubisoft’s much maligned UPlay - a sort of strength in numbers approach which could have been the Switzerland of game distribution.

It’s rare though for industry stalwarts to pivot outside their core competency and this kind of thing will happen again and again. It will even happen to Valve Software and Epic once some new unforseen change happens in the gaming market.

No one can see the future well enough to tell exactly what will happen in an industry, but you can make a guess.

In the case of Gamestop, their business opportunity began with the rise of home gaming consoles and PCs, and when you build a business around the side effect of a disruptive or rapidly changing technology, you have to have an exit strategy or be ready to change dramatically with the tech.

Gamestop seems to have assumed that their business model would work forever without significant changes (I don't mean process or sales changes, I mean changing from something other than selling physical game media in physical stores).

The writing has been on the wall for them for years as the Internet has grown, the size of software programs has grown, the ability of disposable media to hold the software has fallen.

To give you an example of a similarly volatile business to be in, how about tax preparation? If you build a business based on that, you'll be ok as long as tax forms in the US are hard to fill out and the government doesn't change that fact. You might even make a whole career and life out of doing people's taxes. But, you can't lose sight of the fact that the whole thing may evaporate overnight if the bribes you're paying no longer stop the government from fixing the tax code, and if you don't have a plan for when that happens, you go hungry.

A small change in direction could be say gaming themed bars, cafes and toy stores depending on what the location is more suitable for.

Or they could have done an even larger pivot and sold general electronics and even hardware store.