GameStop appears to be struggling quite a bit as its new CEO stresses frugality in order for the company to survive. GameStop is one of the most prominent retailers out there for gaming, but as time goes on, the company loses its relevance. GameStop has been struggling quite a bit since the mid-2010s as games move more and more to digital. Now, there is more of a benefit to buying your games digitally. You can get a game on day one, pre-load it before it officially releases, and play it at midnight (or whenever the game officially releases). There are even ways to play games early and cheat the system if you own it digitally. Physical games allow you total ownership over your games, but that's pretty much the only benefit you're allotted.
With that said, there's less and less reason to buy games from GameStop, especially now as some consoles don't even have a disc drive. It has put the company in a tough bind, but it was thankfully saved for a while by the fact there was a massive runup on the stock by retail investors. However, as things return to normalcy, the company must confront its future. As reported by CNBC, the company's new CEO, Ryan Cohen, sent out a memo stressing the importance of being frugal going forward. Cohen stressed that watching the company's spending and operating efficiently will make sure the company can survive. It sounds like if there's any missteps, it could really doom the company.
"It is not sustainable for GameStop to operate a money losing business," said Cohen. "The mission is to operate hyper efficiently and profitably. Our expense structure must allow us to endure any adverse scenario. Whether it's a difficult economy or revenue deceleration from shrinking software, we must be profitable. Our job is to make sure GameStop is here for decades to come. Extreme frugality is required. Every expense at the company must be scrutinized under a microscope and all waste eliminated. The company has no use for delegators and money wasters. I expect everyone to treat company money like their own and lead by example.
"Prospering in retail means survival. If we survive, we stay in the game. Survival is avoiding the deadly sins that often lead retailers to self-destruct. This is usually a result of the following – buying bad inventory, using leverage, and running expenses too high. By avoiding these self-inflicted mistakes and focusing on the basics, GameStop can be here for a long time."
However, Cohen is not issuing empty words and asking his employees to do things he wouldn't do himself. The new CEO will not be getting paid for his position and noted he is either "either going down with the ship or turning the company around". As of right now, we have no idea how much longer GameStop will be around for, but hopefully, it can survive the storm and remain in business.0comments