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Do you think a Gamestop bankruptcy and complete shutdown will revive yard sale pickups?


phart010
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Whenever it does happen I think it will be a negative on the market. Gamestop keeps current/last gen prices at stable levels. They basically dictate used prices for those sectors and that keeps most stuff cheap. I'm sure theres a word for that but I don't know it. Once theyre gone I think used prices on that stuff will be much more volatile. 

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Administrator · Posted
37 minutes ago, phart010 said:

I value your opinion but I think your portfolio might be clouding your judgment 

They had a rough year, but I agree with jone that they aren't on the verge of bankruptcy or anything. 

Their most recently published fiscal year report showed a loss of about 700 million (ouch!), compared to profit from the previous two years.  However, they still have a decent amount of equity (over a billion), and are clearly making changes (closing stores, other changes) to stop the bleeding and hopefully shift course.

Their bread and butter in terms of gross profit margin, has always been pre-owned items - and they've had declining sales in that area for a couple years now.  They've increased sales in collectibles and accessories, but their margins on those are significantly lower.  

They are making some serious changes in response to their recent performance, including selling off subsidiaries, closing down stores, reducing overhead, etc.  They're definitely going to continue to struggle with the changing game market, but they are clearly aware of the gravity of the situation and trying to change course.

I actually hope they survive and hang on.  As much as people like to complain about gamestop (myself included at times), I do still like having them as an option, and I think they still provide at least some valuable services.

 

 

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I would likely just move my gamestop trade ins to amazons trade in program.  I don't know anyone personally who would want to mess with selling through a garage sale.

I'm slowly shifting to digital but hope gamestop is around for a while longer.  Nice to have the option when I buy physical.  Thankfully my store tends to have cool people working there.

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51 minutes ago, spacepup said:

They had a rough year, but I agree with jone that they aren't on the verge of bankruptcy or anything. 

Their most recently published fiscal year report showed a loss of about 700 million (ouch!), compared to profit from the previous two years.  However, they still have a decent amount of equity (over a billion), and are clearly making changes (closing stores, other changes) to stop the bleeding and hopefully shift course.

Their bread and butter in terms of gross profit margin, has always been pre-owned items - and they've had declining sales in that area for a couple years now.  They've increased sales in collectibles and accessories, but their margins on those are significantly lower.  

They are making some serious changes in response to their recent performance, including selling off subsidiaries, closing down stores, reducing overhead, etc.  They're definitely going to continue to struggle with the changing game market, but they are clearly aware of the gravity of the situation and trying to change course.

I actually hope they survive and hang on.  As much as people like to complain about gamestop (myself included at times), I do still like having them as an option, and I think they still provide at least some valuable services.

 

 

I like ❤️ Gamestop and hope they could stick around. The employees can be socially challenging, but I’ve only had good experiences with prices and quality.

That said, Gamestop currently has no vision. How can they operate like this? The new ceo said they will be redefining their strategic direction due to the new industry trends, but they still have not outlined how.

I see cost reduction measures like share buybacks, store consolidation, headcount reduction. They sold Spring Mobile for $700M, but now it looks like they are trying to build another cell phone business, (presumably so they can sell it again for another several hundred additional millions??)

The fact that they don’t have any major announcements for refining their core game business and their loss of focus (getting back into cell phones) tells me they don’t have a clear vision going into the future.. That’s not good because the market has changed and they can’t keep doing the same thing and expect it to work.

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1 minute ago, phart010 said:

That said, Gamestop currently has no vision. How can they operate like this? The new ceo said they will be redefining their strategic direction due to the new industry trends, but they still have not outlined how.

 

I don't want to spend too much time defending GameStop, but you've just described every single CEO in the country including the ones working for profitable companies.  That should be the least of your concern.  

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3 minutes ago, phart010 said:

I like ❤️ Gamestop and hope they could stick around. The employees can be socially challenging, but I’ve only had good experiences with prices and quality.

That said, Gamestop currently has no vision. How can they operate like this? The new ceo said they will be redefining their strategic direction due to the new industry trends, but they still have not outlined how.

I see cost reduction measures like share buybacks, store consolidation, headcount reduction. They sold Spring Mobile for $700M, but now it looks like they are trying to build another cell phone business, (presumably so they can sell it again for another several hundred additional millions??)

The fact that they don’t have any major announcements for refining their core game business and their loss of focus (getting back into cell phones) tells me they don’t have a clear vision going into the future.. That’s not good because the market has changed and they can’t keep doing the same thing and expect it to work.

Where did you read this?  They are done being in spin off businesses, they are focusing on core games.  Please share a credible link if you read that some where. 

In their financial statements, their philosophy is to consolidate / eliminate underperforming stores. They also want to turn their stores into a "hangout" for lack of a better term.  I believe they have a small beta size (5 to 10 stores) that they have remodeled into this setup that are doing very well.  I.e. you'd go there an be able to play games, they'd host e-tournaments, etc.  

Am I saying this is going to transform them into some money making powerhouse?  No.  I am saying that they have plenty of financial health to weather the storm until next gen.  Next gen will also be disc based and backwards compatible so the demand will still be there for a lot of their inventory. 

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Gamestop may close more stores , but I don't think they are going to disappear yet. I am curious to see some of the changes they will make going forward. I can't see how the collectibles sales can be helping them that much. Looks like most of that junk has to go on clearance before anyone is buying it. But maybe I'm wrong on that. It just appears that way in my area possibly. 

 

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I'm not saying this is a long-term success strategy but I read in a business magazine that, in general, these companies have always had weak years right before the release of new hardware.  People are going to game, but I really do think that when most consumers are setting in June of a year but are aware that in 18 months or so (two Christmases away!) that a hot, new system is coming out, they slow down a bit because they want to "save up" for the future. They may not legit sock that money, but it helps them justify the $300... $400... $500 purchase for the new generation, plus they already start to see the current tech as "old".

I imagine that's going on and is part of the reason for the down year.  So long as the PS5 and new X Box are out by the end of the year, I'm sure they will have a really strong Q4 and should be profitable.  However, I can't say what will happen for the next generation.  Brick-and-mortar stores are having it tougher and tougher to compete these days with Amazon and eBay.

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On topic, no, I don't think if GameStop goes under that garage sales are gonna get better.  My hunch is that those things will stay the same.  I don't think people planning a garage sale really consider taking games to GameStop or wherever when there's a bunch of other things they are trying to get rid of.

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To answer your question: No. As the saying goes, "You can't go back." The culture of online shopping is so prevalent in our society that I don't think we will never go back to a predominantly face-to-face marketplace.

As for Gamestop, I do not believe they have a realistic path to profitability due to the rise of digital purchasing. The transition to digital has been ratcheting up at an insane pace and I expect that to continue with the introduction of the next gen consoles. More importantly, we are nearing the tipping point where those with significant purchasing power (24 years old and up) will have spent their entire lives making digital purchases and paying for subscription services (unlike us geezers who still find the digital-only future a bit terrifying). There is no reason to drive to a Gamestop or even navigate to Gamestop's website to make a purchase when you can do it from your console. Gamestop also has nothing to offer to platform holders (Microsoft/Sony/Nintendo), since every physical purchase is actually a loss of profit on a digital purchase and a potential loss on future profit due to the used game market.

Gamestop absolutely has to try something different (as @jonebone alluded to above), but I don't think they will survive beyond the next couple years. I suspect they will limp on, closing more stores every year, and look for a buyer. Physical sales will still have some value, so I think a larger company will scoop them up, perhaps Walmart or Amazon. Imagine Amazon implementing their cashier-less technology and, boom, you've got release-day delivery for the customer with huge savings on shipping costs to the seller. That would actually be pretty great.

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On 1/15/2020 at 8:38 AM, snes_collector said:

Prices will go up if everything has to be bought/sold online. I don’t understand why so many people seem to want GameStop to go under

The common theme I see on other forums and social media is people are under the impression that Gamestop is the main reason holding back independent video game stores from thriving. 

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