GameStop appoints chief technology officer and two additional executive hires
news.gamestop.com
news.gamestop.com
If Melvin Capital isn't bankrupt after all of this, there might just be A LOT of broke redditors who cashed in their lifesavings on this gamble.
What's the proof that any retail investor actually bought GME?
How many retail investors actually bought GME?
How much money did they win or loose?
Using inspect element sounds like too much trouble when you can just use fake money instead.
I'm not saying I feel strongly either way, but I think peopel on the internet lying is a pretty simple explanation.
On their free time they do tutorials about their process, their tools, etc.
Saying that they are a retail trader is like saying that Warren Buffet is a retail trader when they trade with their own private money and not the money of their clients.
---
Also, you can just open a paper trading account and trade with fake money. Then the screenshots look real.
I do this all the time when I need to explain an options play to somebody. Just switch to paper trading, give yourself a million $, and enter the trade.
If I had to show somebody in a podcast how to trade, I would open a paper trading account just to put an amount of money that would be reasonable for that person, so that they can better get a feeling of what the wins and the losses look like.
I find the memes there funny, and I like interacting with the people and just talking dumb stuff.
I think most of the screenshots that get posted are fake, and that most people that frequent it also mostly do because they find it fun.
Not necessarily inspect element, but also screenshots from paper-trading accounts, etc.
If you follow the stock market, it is a relatively random place, and train collisions do often happen, so it is nice to have a place to talk about those with people that find them funny, and that also find "let's put out this fire with gasoline" funny.
Is that proof enough? that's up to you, but I doubt most people have seen "proof" that hedgefunds have been buying up shorts either, we just trust that we aren't being lied to by whoever is doing the reporting (and I personally find that to be plenty sufficient).
See e.g. https://fortune.com/2021/02/02/robinhood-gamestop-restricted...
"Clearinghouses are SEC-registered organizations that act as the central depository for securities. They keep a record of the stocks owned through a brokerage. Clearing brokerages, like Robinhood Securities, are members of clearinghouses."
"The amount required by clearinghouses to cover the settlement period of some securities rose tremendously this week. How much? To put it in perspective, this week alone, our clearinghouse-mandated deposit requirements related to equities increased ten-fold."
https://blog.robinhood.com/news/2021/1/29/what-happened-this...
i have no idea why people think robinhood is a clearinghouse, that doesn’t make sense. they don’t want to do that! they want to do PFOF with execution or make settlement take 0 days so they can further take advantage of retail or whatever. being a clearinghouse sucks. no one likes you. banks don’t want to do your job.
Citadel says you were right to ask these questions:
https://assets.bwbx.io/images/users/iqjWHBFdfxIU/i9SnRzR8AM1...
https://www.bloomberg.com/opinion/articles/2021-01-29/reddit...
The main takeaway is that the flow was, essentially, net 0. So retail (or the bit of retail flow that Citadel saw, anyway) wasn't buying GME more than selling, in aggregate.
Also aforementioned impact on robinhood and other retail brokers.
I call BS. Selling a huge amount of shares and then buying them again will not generate a profit.
When you have millions reading a forum saying "BUY THE DIP" and you can create a dip, then you probably stand to make a lot of money.
> A short ladder attack is when a stock goes down for totally valid, normal reasons, but the bagholder realizes a conspiracy theory is preferable to admitting to a dumb trade."
Also, I like these tweets by Jima Chanos (@Diogenes), well-known short-seller:
> Can anyone explain to me what a “short ladder attack” is? I have seriously never heard the term before this week.
> Now I know why I had never heard of a “short ladder attack”...Because it is complete gibberish.
Let me google that for you. OMFG, what's this 2014 article that details how this works?
https://seekingalpha.com/instablog/11442671-gerald-klein/309...
The short ladder attack actually is a stupid conspiracy. It's the idea that you can paint the tape by trading back and forth with a conspirator, but do it at a price that's lower than fair market value. This is impossible. If you try and buy at a price lower than fair market value you aren't going to be matched with your conspirator, you're going to get matched against the order book at the best possible price. So to ladder down you need to control the entire demand in the market. It's absurd.
Isn't that what they did with robinhood/others restrictions?
https://www.reddit.com/r/investing/comments/lbib0x/the_myth_...
1. buy gamestop stocks
2. call in SJWs to 'fight against the bad guys (hedge funds)' by buying gamestop stocks
- they relay this message to others
3. watch price go up, thanks to campaigns from SJWs
4. sell off when the price is right (feels highest)
5. watch the price go back to normal valuation - you can't expect this high price to continue forever.
6. watch people who were fooled by SJWs cry over their lifesavings
this is a financial crime, though the victims fell for a temporary 'feel good' moment... so I guess they 'paid' their lesson?
as for Robinhood, blocking 'buy' seems to be a protective measure that backfired too much. Robinhood's branding depends on how it can explain this well...
edit: I agree that it's not a 'financial crime' by law... I just mean it's a detestable and almost 'criminal' campaign.
How so? I may be ignorant, but isn't that just the way the stock market works. Sad, yes. Crime though?
but this time, there's no 'fradulent' element, so I guess no.
If there were promises of earnings, it might have been.
Though it'll be really difficult to make a law preventing this without hurting beneficial actions.
I think you'd be hard pressed to make that argument on either side.
there's a Korean investment channel that explains how people were gullible, and it's really funny to hear the fiascos...
...but not when I'm the gullible that is!
the whole premise of the campaign is to 'fight against the injust hedge funds' (by burning your own money, that is)
Where this hedge fund idea came from, i'm not entirely sure. I think it was just a game when someone woke up and explained that this massive amount of shorting could not be covered if everyone bought shares. At some point that just spiraled into some altruistic hedge funds are evil marketing thing.
I just find it amazing how so few people actually go on WSB, but have a garbage pail of opinions. Seriously, less then 5 min on WSB shows how incredibly wrong the media has been regarding that community or their motives. Mark Cuban, Kevin Oleary and a few others are backing what wsb are saying due to the exposure they generated of how manipulated the stock market is. This isnt, "this is the mob ruining the market". This is, "oh boo hoo did the wrong people manipulate the stock market and it hurt the hedge funds?"
There will be regulations on this. The trick is to regulate the market so the average schmuck can have a more level playing field instead of the cards stacked in the hedge funds favor.
you iterated some famous people who are supportive of WSB, but... so what? Are they 'the wise ones of the stock market'? Are they financially supporting financial damage-takers?
They're just famous people, and that's all.
I agree that making a more level playing field is good. But that should be done by congress and law makers, not by burning gullible people's money.
Part 2, again, you've never been on WSB for even 1 minute. At every part of this venture, everyone says this is a terrible profit venture. Everyone on wsb shows off their losses and calls it "loss porn". The only gullible folks are the ones listening to the media. Namely CNBC. Theyre the ones pushing the profit narrative, not wsb. This was more to screw over predatory short sellers and to help a few struggling companies people like. AMC for example, got to leverage their boost in stocks to have a fighting chance to survive through 2021. Effectively holding off bankruptcy for now. Gamestop is now able to position themselves to fight through the next few years.
And is 'loyalty towards a company' for having few shares a good thing? loyalty towards what ends? towards massive financial damage?
Some examples I have thought of include: * put 3D printers in the stores and sell custom objects based off of your gamer profile.
* convert the stores into a gamer bar and show eSports tournaments.
* host LAN parties or move into tabletop games
Gamestop pivoting to a gamer bar seems incredibly unlikely. Retail is not restaurants -- the business logic is all sorts of different -- and likely zoning issues would prevent many locations from suddenly becoming restaurants.
I've talked to several owners of failed e-sport restaurants. They all say the same thing. It's sad, but also the reason you don't see tons of them around, even if gaming as an industry makes billions of dollars.
But who knows, maybe now is not the right time. Besides, most GameStop locations are pretty small and not really zoned for a bar. It was an interesting thought though.
Every now and then I see a new one pop up - usually focused more on consoles rather than PC games, but they seem to inevitably go out of business.
Neither am I, but based on strong anecdotal evidence from every trip I've made to Micro Center in the last couple of years, I suspect your suspicion is accurate. Especially when I did a custom PC build a couple years back, and had to visit the support department due to my motherboard needing a firmware update to run with the CPU I'd picked - I found myself all but constantly tripping over infants in Fortnite T-shirts who, I assume, had talked their parents into spending thousands of dollars on top-tier gaming rigs with the argument that it would help them develop a marketable skill.
Good on them, I say; at a similar age, I did much the same. (Athlon 600 and a Voodoo3 3000! Back when Alienware was still an upstart doing white-box builds...) But, yes, all of that's to say that I think you're absolutely right, and GameStop would be very well advised to pivot in a similar direction to what you describe. They'd need to poach some expertise from Micro Center, which would probably be expensive, and while I suspect they'd get good bulk pricing on components, there'd still be significant capex there too. But there are a lot of places in the US where GameStop is and Micro Center isn't.
Granted, I think the days of the Internet café are over for good in the US, so as a hangout hub I don't see it working. But as a place to go to get custom gaming builds plus support, peripherals, and upsells for same, I think there's real potential there, especially if you're also selling all the consoles and appurtenances thereunto. And most especially if doing all this puts you in the right place to be on the leading edge of the consumer VR boom, when that finally comes...
The reality is gaming is moving into an interesting extra-social space (complementing social spaces like TikTok), where a lot of the kids I know use these games as a core means of socializing. This is especially true after the pandemic lockdown.
It'd make sense for them to offer some way to do this online and pick up in-store (or, hey, ship directly). But, it might bring people into the stores or you may have people that want to "feel" examples of the material they're printing the item in (assuming it's offered with different options, which would be a good idea).
[0] I'm thinking FDM here, mostly, but you're basically taking a material, heating it to the "right" melting point, applying it to a surface where gravity and controlled cooling cause the layer to adhere securely to the previous layer. The printer can only print as fast as it can reliably melt/adhere the material, any faster and you either under-extrude or fail to adhere and end up with spaghetti.
NOTE: I tried to pitch this to a former employer of mine and they didn't really see the market.
If it took 15 seconds, or even five minutes, to 3d-print a model like that on a desktop machine, then sure, there might be something here. But the Stratasys J750 production printer that Shapeways uses for multicolor prints [0] requires, per its user manual [1], "between several hours to several days" to complete a print, depending on size. It also weighs half a ton, needs a room and about 3 kilowatts to itself, and those are where its environment requirements start [2] - not to mention that the uncured printing materials appear to be quite toxic, judging by the bulk of safety, first aid, and hazardous materials handling discussion in the user manual. And that manual is what you're meant to use as an aide-memoire after being trained by a Stratasys field engineer in how to operate the machine at all.
The machine is apparently designed mainly to print anatomical models accurate enough for surgeons to practice on them, and in that context its engineering requirements are reasonable. They're also reasonable for a company like Shapeways, which entirely revolves around 3D printing and can arrange its physical plant to suit. I won't even say it's impossible to cram something like this into a strip mall, but it'd probably need to be next door to an outpatient MRI clinic or something like that, to get the services it needs without the cost and permitting of having the runs put in - you'd have to pick the site to suit the process, and GameStop locations aren't picked that way. And even after all that, the print time is still a killer.
In theory, sure, it would make sense. But in practice the tech just isn't there yet. About all that leaves, I think, would be "BOPIS for Shapeways", and I doubt that'd be a big enough draw to be worth the trouble - at that point, it probably makes more sense for the studios to do something like Hero Forge, and cut GameStop out entirely.
[0] https://www.shapeways.com/materials/multi-color-polyjet
[1] https://www.stratasys.com/-/media/files/documentation/polyje...
[2] https://www.stratasys.com/-/media/files/printer-spec-sheets/...
You can only slightly "buy your way out of the speed problem", which is as much dependent on the material as it is the capabilities of the machine. An 18 hour print for a small item is not unusual at all, for me, but I'm on a pretty simple printer.
A stratasys-style machine wouldn't make sense for this application. I think "high-end desktop quality" FDM would suffice for accessories/GameStop (with, perhaps, an option to get items printed in aluminum/other exotic materials shipped -- partner with someone), so the aim would be to find a reliable, enclosed (with appropriate filtration[0]), FDM (or similar price/quality), pick up 3-5 of them per store -- different sizes -- and spend a mint building software for your customers to use to interface with the printers[1] and automate the hell out of the ugly parts of the printing process (print-bed surface prep/part removal, maintenance and cleaning). And make absolutely sure the model has every convenience feature (like bed leveling, temperature controlled build chamber)
I'd probably limit material types to one (production) and one (support, when necessary). Optimize all of the hardware for the printers to the specific characteristics of that material and choose a material that prints easily/quickly -- PLA is a reasonable choice, prints pretty quickly but is brittle/fails over time and has a low melting point, ABS has several toxicity concerns and is finicky as hell to print with, but it's cheap and when it prints "right", it's durable.
It sounds crazy to do something like this with desktop 3D printers, but it makes the most sense. $1000 will get you one hell of a box with the ability to print in multiple colors and with more than one hot-end. It's probably, as you mention, not quite there yet -- I know from personal experience, messing around with the slicer software can take some time. There'd be a lot of software to be written and probably some additional hardware to design to fit the purposes of the stores printing needs. But, I guess you'd give the staff something to do while waiting for customers to not come in and buy games. /s :)
While they're at it, throw in a large CNC/laser cutter, re-tool to sell dev boards/robotics equipment, replace "Game" with "Hacker" and open up several hundred hacker-spaces around the country. Perhaps that would have worked better for Radio Shack. But I'm only half-joking -- every time I walk into small-time game/hobby/computer shops I find that the (often young) staff there are makers and would fit right in with a little training.
[0] This, too, depends on the material. And you might need to call in the lawyers/etc to figure out how things are going to have to be designed to avoid a future class-action from your employees/customers due to exposure to fumes. ABS is known to be problematic; it's also cheap and has many other desirable properties.
[1] The good news is that there is a ton of open-source pieces to start with.
If they can capitalize on the goodwill and build products that people like and not over-monetize them I think they are in a position to do well over the long term as, hopefully, a lot of these stock holders are actually long term holders.
It's a tough spot.
(1) 3D Printing -- really good idea; I'm rehabbing my 3D printer for my kids, this evening, so they can print Among Us characters. If I didn't have a 3D printer, I might consider that sort of option, but I'd probably go online first. And that's kind of the problem they need to find a way to pivot away from.
(2) Gamer Bar -- I think a few have panned this idea. I love it, but not for GameStop. Their locations are unlikely to be ideal for restaurant style-businesses. And while it's a different kind of business, they'd still fall under the same regulations which would require substantial reworking of their retail outlets. Assuming "bar" means "alcohol", that's going to knock out many of the retail locations -- any where getting a liquor license/landlord approval isn't possible/practical/affordable. I have no idea if this would be popular, or if it would fall victim to "teen dance club" problems[0] ... often the way I imagine things "should be" aren't they way they turn out :).
(3) Tabletop/LAN Parties -- Not sure LAN parties are all that useful these days, but maybe? Moving into other forms of games seems really logical. Most hardcore gamers that I know are also into a variety of adult board games and all have disposable income.
Assuming the idea is "stay retail and keep many of the retail locations open", I think the biggest problem is finding a product that they can actually sell. I know people still buy games in physical formats, but that's ending at some point. All of my game/software purchases are digital. All of my console purchases are online and all of my used/pre-owned purchases are craigslist/marketplaces.
I stopped using GameStop to recoup the value of obsolete games/consoles because the prices they offered for my used stuff was never competitive and the cost to purchase (often beat-up) used items from the store were similarly not competitive. Granted, it's been years. Offering to sell used products on consignment or with a firm, low, commission would change my mind. Offering both options would cover everyone.
Maybe going back to 3D printing -- perhaps providing customizable accessories to a variety of console components (i.e. grips for controllers, knobs with icons on them, etc) in-store might be an option. I don't know if that's going to be the end-all, but the cost is reasonable considering it offers a huge inventory on-demand. Focus on covering accessories that are niche but popular and offer customization since they're print-on-demand.
[0] Where I live, there were a few notorious "Teen Dance Clubs" that charged cover, didn't serve alcohol, and were pretty much the most popular place for the police to visit any night they were operating for all kinds of minor crime.
I really like the idea of a "Teen Dance Club". There is honestly no place for young people to hang out. We used to go to the skating rink or walk around the local shopping mall, but the rinks are almost all gone and malls have made being a teenager illegal.
This club did not serve alcohol, but from personal experience, alcohol/weed were not hard to come by. People would throw shots of hard liquor into the $5.00 cokes, there were regular "fights" usually originating from some barely-past-puberty-knob deciding some other kid was looking in the general direction of the female to which said knob was attracted.
This is a problem at most businesses catering to teenagers, unfortunately. But it's more of a problem at certain kinds of businesses. We have three skating rinks within about 20 miles (all were closed and not sure all survived). One of them was around when I was a kid and there were occasional problems, then, but really nothing compared to what I saw at one of the two "Teen Clubs" I visited. I think part of it is that rinks (roller/ice) cater to families and teenagers. I have 4 kids. If we're out and some teenager is misbehaving, the words "knock it off" have been known to fly out of my mouth with immediate effect. It doesn't matter that there's a large number of unsupervised teenagers, the number of parents -- especially ones that aren't uncomfortable stepping into things -- offsets the grief the "bad teens" can create for everyone else.
I hear ya, though. We used to hang out at malls, rinks, hell we had a whole abandoned stadium that we could roller blade on for $5 on the weekends[0]. Now the few malls that remain are outdoors, which is awesome when it's 16 outside... it's as if they're trying to get me to buy everything online. We have a laser-tag place that feeds you and let you play unlimited from 8:00-midnight for $20[1] and a few others, but they're all closed for the moment. It is awful for kids right now.
[0] The Pontiac SilverDome actually rented out skates/inlines and let you roller blade around the interior walkway. Even when it was busy it was hard to tell because of the wide walkways designed to serve depressed Lion's fans.
[1] Oddly it was owned by a local (Christian) cult run by a chiropractor; I took my kids there nearly every weekend of the winter for two years and everyone who patronized the place, teenagers, kids and adults, all enjoying themselves and never an issue. The only hint about the religion of the owners was that they played Christian Pop/Rock over the speakers -- makes me wonder if blasting Jesus music calms teenagers? :)
> host LAN parties or move into tabletop games
The concept of “gamer bars” is woefully unexplored and one day I hope to retire early and start up one. Get space at a prime location, completely retrofit it, make it state of the art technology-wise.
The goal would be to make it a spot that high profile streamers would book months in advance for special events.
GameStop is positioned to do this kind of thing but at nation-wide scale.
The idea that they can pivot into tabletop hubs has been raised a few times, but I just don't see it - if you've ever talked to a tabletop game store owner, you'd realise that the "FLGS" model doesn't support that many businesses in a given area - even at 1/10th the density of gamestops, most are kept afloat by high margin items like magic the gathering cards or warhammer minis/paints. The tabletop/board game community stuff is treated either as a marketing expense or owner hobby. I don't see it sustaining a chain of Gamestop's size without serious downsizing.
Gamer bars obviously have licensing requirements like any other bar. Don't know how loose it is in the US, but good luck getting a bar approved in the middle of a shopping center in my country. Also, most gamestops just aren't that big.
3D printing is SLOW. A figurine only 2-3 inches tall could be relatively quick (under 4 hours), but would lack detail. Something in the 6-8" height could look good, but would take 8+ hours to print. From what I've read, most private 3D printer owners charge about $2/hour for 3D printing (plus the cost of filament and a print setup fee of some sort).
> * convert the stores into a gamer bar and show eSports tournaments.
Most GameStop locations are way too small for this. If they purchased larger venues, then they're competing with Dave & Busters, Big Al's, Round1, and possibly regional chains/locations I haven't heard of.
> * host LAN parties or move into tabletop games
I don't know how well the LAN thing would perform in the American market. I've seen pay-per-hour PC gaming locations years ago, but they don't last. The demand just isn't there, especially when game streaming like Stadia is a thing.
Tabletop game stores don't make a lot of money unless they can sell a LOT of M:TG cards and Warhammer figurines, I expect WH to die off with 3D printing being a thing.
> GameStop and Microsoft have entered into a multiyear agreement that gives the video game retailer a cut of every digital purchase made on any Xbox consoles it directly sells going forward, Ars Technica reports.
With someone at the helm that can negotiate a deal like this, I'm not worried about GME.
Checking LinkedIn Mr. Francis was at AWS for ~1 year working on DocumentDB, the MongoDB compatibility layer.
Also, wouldn't it make more sense to poach from Valve or Epic?
I would find it hard to believe an accusation of "insider trading" if an GameStop officer sold a bunch of stock last week, rather than the much more likely public-information explanation of "we're definitely not a $25B company and everyone knows it".
See Rule 10b5-1
https://news.gamestop.com/news-releases/news-release-details...
I share your sentiments.
Access Denied
You don't have permission to access "http://www.gamestop.com/" on this server.
Reference #18.8ba72917.1612368077.10f974bdIt was unhelpful that the individual noticing the problem worked in legal. We weren't told "last modification of the work" but we were told we could not display a date in the future. I wouldn't be surprised if "last modification of the work" is the correct approach.
[0] Someone didn't have a date for New Years' Eve, I guess.
It no longer exists, but they likely still retain IP in this realm.
SEC would need to approve their offering quickly.
However I'm actually not sure how quickly companies can do that. It has to be done by the board. Can they just hold an emergency meeting and authorize it within hours? Or is it the kind of thing that requires certain approvals which require weeks or months?
It could also be a huge PR backfire. If the stock then drops back down, then they could be accused of taking advantage of naive redditors -- not that that's necessarily true, but there's definitely risk of it. I mean, is that what a "responsible" public company is supposed to do?
The problem is shareholders suing for securities fraud. That the people who bought at the top are now shareholders. The company has a fiduciary duty to them. If they issue new shares and sell them, that lowers the price. Even if everyone agrees that the price doesn't make sense and issuing new shares is actually good for the company (the price will drop less), the company actively did something the shareholders probably weren't giving fair warning about.
> Happily, GameStop does have an ATM offering going. It put it in place on Dec. 8, 2020, when the stock was at about $16.35. The way these things work is that GameStop disclosed that its bank could sell stock—up to $100 million worth—“from time to time” at GameStop’s request “consistent with its normal trading and sales practices”; it did not disclose any particular schedule, and has not yet reported if any shares have been sold, or how many, or when. So I don’t know if GameStop had sold the whole $100 million before Friday’s wild run, or if it had any stock left over to sell; if it had any left over, I don’t know if it sold it all on Friday. I hope it did! [1]
On the other hand, that may have been extremely lucky. When Hertz tried to issue more stock in June, the SEC objected so it never happened -- as it was too likely the buyers would be purchasing essentially worthless shares. [2]
[1] https://www.bloomberg.com/opinion/articles/2021-01-25/the-ga...
[2] https://observer.com/2020/06/hertz-car-rental-bankruptcy-sto...
Optimistic might be $90
When did Steam get started? The middle-naughts? That was the time for GameStop to act. It's too late now. Even if they have the money, do they have the leadership to pull this off? Maybe they'll try, but it will be an uphill fight, even with the Chewy founder on the board.
I expect the execs will find some way to parachute out and that there will be no transformation of GameStop.
Can a brick-and-mortar dinosaur (with a lot of temporary money) just buy their way into being a Steam competitor? I doubt it.
Google Stadia?
Actually Stadia will be dead in a year, judging by what has happened with it. Still, what does gamestop have in terms of software? A webdev team? Creating a games streaming platform is an enormous project.
15 years ago they could have tried to compete or pivot.
Now they are in position of an underdog with no experience vs established platform - Steam, Epic, GoG - if talking about selling games.
You are basically suggesting that Gamestop have a second chance to compete vs Amazon, or Ebay, or Facebook for that matter.
They are starting from scratch, all they have is physical locations. And presumably infrastructure to manage those locations. No software teams, no user base, 0.
I realize i sound very negative but saying there is a second chance for a ship that has been sinking and captain gave everyone a bucket as means of coping is not going to miraculously fix itself. Especially since they are now 100% thinking how to exit with that cash.
I don't know if you know this, but that's actually kind of a big deal. Nationally distributed brick-and-mortar stores with logistics and connections in place to supply these locations are expensive and time consuming to stand up.
Those locations and logistical infrastructure could be a huge opportunity for them to pivot with, or you could think of it like collateral/capital that they could liquidate for pivoting in a different direction.
> No software teams, no user base, 0
Believe it or not, not every business has to have teams of software people churning out gamified node apps.
Not every company needs to start with a user base to abuse and exploit in order to be successful, and not every company needs to become the next Amazon/Google/Tesla in order to be successful and contribute in a meaningful and sustainable way to the economy and provide value for customers.
I sincerely hope you don't approach every challenge you meet in life with the same defeatist attitude. Use your imagination and don't give up!
Like what, OnLive, which is dead? And Stadia, which is a massive failure which Google will shutter in the coming years?
They've got the space, and after 18 months of limited social contact it could be an opportunity
A hangout spot...a Gamestop-branded Dave and Busters or other video game lounge makes a lot of sense if you have the space. But the business reasoning is backwards: get people in and get them in a mood where they'll buy trickle-goods like food/drink, time on a given display...And all the while you suddenly have to contend with the culture of your patrons a lot more...directly. A snotty kid being brat in your store eventually leaves and is forgotten. In this new model, that kid wants to stay in your store a lot longer and worse will try to interact with the other patrons (that being the point of your store, after all).
Steam and Epic were able to leverage their catalogue, and got moving early on. Moving into an online game platform would be far more of a than building a hangout.
> And all the while you suddenly have to contend with the culture of your patrons a lot more
You do, but Gamestop don't have much choice, they're in a dying market that's been disrupted.
Local boardgame shops and bookshops near me have managed to survive by moving into this type of business.
Turning businesses around is HARD.
I hope they do something, but I'm not optimistic.
Not turning them round is harder.
* CEO gets a golden parachute and finds a new job. A competent CEO will always find a job. A turn-around is risky, and a failed turn-around will have exposes and will ruin a career. Easier to stay-the-course.
* Workforce is laid off, struggles for a few weeks, and usually finds new jobs. The layoff sucks, but turn-arounds involve equal layoffs (and indeed can be harder to find jobs after; my employer went out-of-business is a mighty good reason to leave a company). Employees also hate change; in many cases, finding new jobs like old jobs is easier than re-qualifying.
* Shareholders lose a little bit of money, but are pretty diversified, and from a 50 trillion market, GME even at its inflated valuation is around 1/20th of a percent.
... and new ventures come in and fill the gap.
Capitalism is built on survival-of-the-fittest. If a company is not fit, it's sometimes more humane to kill it and replace it with a fitter company than to keep it straggling along. Companies aren't people; they're abstractions. There's no moral remorse to replacing a company with a better one. If you're running DBCorp which has a mediocre, buggy product, and a mismanaged workforce, and I run DBInc which takes your customers, hires your workforce, and has a high-quality product and well-managed workforce, in the end, everyone often ends up happier.
Vultures might want to pick the bones, and many owners might not care, but some do.
Of course if you think it's hard you're free not to bother.
What a concept.
The owners are the shareholders.
GameStop was started as a side gig by Riggio, who was also the founder of Barnes and Noble. He has bigger things to worry about, like his retirement. It's been run by professional executives for the most part.
DeMatteo is still around, but I think that's it for the founding team. If you can call a series of merges a founding.
Yeah, if I own a company, I'll sweat and bleed to make it successful. That's the #1 founder / startup advantage.
That's not true for publicly-traded companies. Those are an abstraction. If a CEO is making $35 mil and someone offers them $50 mil, guess where they're going?
A lot of startups don't realize that as a source of advantage, but it's a big one. It's a lot of where the agility comes from too. A professional CEO need to first worry about keeping their job, then about their next job, and finally, the organization. For a founder, for the most part, those are one and the same.
If you gave me a failing public business as an owner -- with no accountability, no board to please, no existing executive team to back stab me, and all the upside -- I'd do better than most CEOs in turning it around. That's not because I'm more qualified or competent, but because I'd have the freedom of being an owner. The original CEO, if properly incentived, would usually do a better job than I would, in turn.
They are on the brink of maker movement event.
Potential end of covid (or at least restrictions), people will look for places to meet and chill together.
Its not going to be easy, but they have an angle here i think.
It's not going to be an easy option, but it's pretty much the only option other than winding up the company.
* I don't own GME or have an interest in this whole thing one way or the other, nor do I have an opinion on Roaring Kitty's research. I just find this all very interesting to follow.
I guess it does make sense if you intend to buy games as gifts for other people.
As for PC gaming, it essentially already is all digital.
I don't know anything about how any of these companies operate logistically so I can't make any comments on this. It sounds like you'd like to put yourself on an infinitely long waiting list that fulfills PS5 orders on a first come first serve basis. My assumption is that something prevents companies from being able to do this because not a single one of them has this implemented.
Tangent - is that direction really guaranteed for console games? Digital sales have been around for a long time and I realize the console world is really pushing it now but I'm curious if console gamers are buying in to it as fast as other markets (e.g. computer gamers and general entertainment markets (movies))? Maybe the pandemic is speeding it up[0]?
I've bought exclusively digital for computer gaming for over a decade (maybe two decades, yeesh) now but continue to cling to physical for console gaming because of the trade-in factor. E.g. most recently when the Switch came out I waited a few months for one to come in to a local used games store and traded a Wii U + games for the Switch + Link's Awakening all on trade-in value. I have done pretty much that or something similar for console upgrades for as long as I can remember. I don't even have a sense of what a new console costs at this point.
I have always assumed that is sort of the norm but I suppose that wouldn't make any sense for the broader market, hah.
[0] https://www.polygon.com/2020/8/11/21363951/video-game-sales-...
1. An increasing amount of video game spend is now add-ons. EA makes as much off FIFA Ultimate Team as they do off FIFA, maybe more. GameStop gets a bite off the first retail sale, and off used sales, but they don't get a bite off all the various aftermarket transactions. All three consoles now have pay-to-play online. 2. An increasing amount of video game spend is now free to play. Fortnite is free to play. Call of Duty Warzone is free to play. Apex Legends is free to play. Valorant is free to play. 3. An increasing amount of video game spend is on subscription plans, obviating the need to buy software. Microsoft has re-aligned their entire company around Xbox Game Pass. EA has EA Play. Ubisoft has their equivalent.
So even if 50% of nominal unit sales for digital + physical software remain physical, that's now far less than 50% of dollar spend. Every console is hooked up online, and with the new generation some models don't even have disc drives.
GS can probably retool itself to do a better job of competing with Amazon and eBay -- and they should! -- but it can't do a better job of competing with all of the secular pressures killing games retail.
Stadia is currently on the verge of flopping and we're not even sure where other streaming services may go. Streaming video games are literally constrained by the laws of physics and the need for extremely responsive user input. It's exciting but it's also a whole different engineering problem than what Netflix solved in order to edge out their advantage over Blockbuster.
Steam, the Playstation/Xbox Stores are the correct comparisons. That said, I doubt Gamestop has been struggling these last few years simply because there has been a movement towards digital downloads.
People seem to forget that these digital stores have existed for the longest time and are not at all new innovation. Take a look at the sentiment towards digital only consoles - overwhelmingly negative. Newer AAA games require so much storage space that the progression of networking bandwidth aren't keeping up with the demands at all.
I'm not going to speculate where GameStop is headed because they haven't announced those changes yet. However, the speculation of evaluating their future based on digital downloads or the Blockbuster story is absolutely foolish.
a) People are getting faster Internet connections, which enables them to actually utilise digital stores. The PlayStation Store is almost 15 years old and I can imagine how bad the average consumer connection was back then. And if you have a slower connection, you can still pre-order and pre-load games.
b) Physical medium is not exclusive to brick and mortar. I am myself a collector of physical games (167 games in my shelf at the moment I believe) and I don't really go out and buy games. I just order them online.
Basically, they're not only competing against the growing popularity of PlayStation Store, Xbox Live and Nintendo e-Shop, they're competing against Amazon.
(A little anecdote, I recall downloading video games on Steam 10 years ago and it took me on average a few hours. Now in the present, newer games like RDR2 took me days.)
For b), I'm with you. GameStop does have an e-commerce platform, so they're hardly exclusively brick and mortar. Walmart and Target hasn't disappeared because they're suddenly competing with Amazon. But cmon, there are highly upvoted posts in this thread speculating all video games are digital only within 5 years. Do you believe that?
Xbox and PlayStation now require you to install all games on the SSD so discs lose out on that advantage as well (unless you're regularly uninstalling and re-installing games, in which case the BD might be faster).
No, but simply because the console lifecycle is longer than 5 years and physical games can't die with the PS5 and Xbox SX around.
However, PC games are absolutely digital only already. Even if you buy a swanky collector's edition of a game, you don't get the game in the box. There's just a piece of paper with a download code. And unfortunately Sony and Microsoft have an incentive to kill physical games since they can get more of the profits if everyone just buys from their stores.
PC was never their primary market for as long as they existed, so I don't think this was the dent to their cause.
Physical sales are way, way, way down from 10 years ago already. It's only going to trend down further. I wouldn't call that a reliable source of cash flow.
Ok, maybe you're in it for the long run, but it clearly wasn't worth $300. Cash out, buy back in a month when things settle down. Then again, he's been so public with this that if he were to sell and ghost WSB and Youtube, he might legitimately fear for his life for the next decade. Maybe there's something to be said for traders not telegraphing every trade.
He was actually down something like $30M from his peak at end of day yesterday. He’s cashed out $13M and had like $10M left.
You can’t download cat food and your console doesn’t die if you don’t buy it a physical game every single month.