To some, GameStop is a relic of the glory days of gaming before the arrival of the filthy casuals where true gamers would line up passionately at midnight in the cold and rain to get their hands on the next AAA title. To others, GameStop is a painful reminder of deep losses and a timeless example of the institutional market manipulation between hedge funds and stock brokers. And to a faithful few, GameStop is the superstonk and hodling is the best way to fight back against a game rigged against retail investors. But the real question with GameStop that no one has answered is that beyond the headlines, daytrading, and memes – is there an actual business?
In this episode, we’ll cover the three eras of GameStop – from its dominant control over gaming in the mid 2000’s into an overextended mess throughout the 2010’s and finally to the present day, where the company is deep in a last-ditch-effort to reinvent itself as a tech startup and restore relevancy: diving headfirst into every trend – Web3, blockchain, and NFTs. The fall of GameStop is as much a story about strategic mistakes as it is about market disruption and abandonment.
GameStop enjoyed its most dominant era from 2004 to 2012. From Gears of War and Twilight Princess in 2006, Halo 3, Call of Duty 4, and Wii Sports in 2007, Super Smash Brothers Brawl and GTA IV in 2008, Modern Warfare 2 and Uncharted 2 in 2009, Halo Reach, Starcraft 2, Black Ops in 2010, Skyrim and Dead Space 2 in 2011 are just some of the titles in that 6 year span helped pull gaming into mainstream attention. GameStop was a beneficiary of this golden era, where video games shed their stereotype as obscene, time-wasting button mashers for solitary male teens and into mainstream, mature, cinematic, and interactive entertainment that anyone could enjoy.
In the 2010’s, GameStop entered into its second era – a 6-year plunge downwards of struggle and strife from 2013 to 2019. In response to seeing the studios and publishers moving against them, the company opted for rapid diversification through M&A. The blunder that GameStop made was that all of the companies it acquired (Kongregate, Simply Mac, Cricket Wireless, and various AT&T resellers) were all equally fragile middleman businesses facing the same pressures that were happening in gaming (Adobe Flash games, wireless cellular services, Apple products).
Free of bloat and with a return to gaming – GameStop would now enter its third and present-day era of Web3, led by retail investor cult hero Ryan Cohen. The fundamental problem is that GameStop’s NFT exchange is just one of hundreds floating around these days. New exchanges pop up every month, with some pushed by organizations with greater relevance and penetration than GameStop – like OpenSea, Blur, Reddit’s Vaults, NBA Top-Shop, NFL All Day, Magic Eden, and Rarible.
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0:00 Power to the Players
1:32 The Golden Era
12:05 The Struggle Era
24:39 The Moonshot Era
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🤔 If you were GameStop’s CEO leading the company through its second era of struggle in the mid-2010s, what and how would you have invested the $470M+?
It may be tempting to answer esports or streaming as low-hanging fruit, but consider that esports (including the leading brands like TSM and Cloud 9) are unprofitable businesses subsidized by millions in venture capital.
This episode builds off the live services episode from Season 1, which covered that making video games in themselves are expensive and unpredictable bets that take years of development and millions in costs. That episode analyzes titles like Witcher 3 alongside studios like Rockstar and Square Enix. Good games do not always sell while games that do sell are not always good.
https://youtu.be/B71mbSBgZ3E
For us old timers, I'm not sure I'd characterize the era before 2006 (which seems/feels like 2-3 years ago) as when gaming was "Niche". The launch of the PS1 in 1995, PS2 in 2000, heck even the Dreamcast launch in 1999 generated a lot of hype at the time. Not to mention that glorious Christmas that was 1991 when the SNES launched in North America (that was a magical time). Gaming was always pretty "mainstream" as far as the target demo was concerned as it is now. I don't know why this mischaracterization persists. I don't think I even knew any other kids my age that didn't own an NES or C64 in 1989 while i was in elementary school. The only thing that's changed is the original kids like myself that grew up with games simply didn't "Grow out" of games as our parents told us we would. Instead we largely kept with them like we did with all other media: movies, books, music, etc. It wasn't that gaming gained some kind of adult audience afterwards, it was simply that we didn't grow out of it and give it up and grew up to be middle agers.
Forgot about Game Informer. The subscription that came with new consoles felt like such a luxury in my late adolescent/early teen years.
That was a great magazine and a great memory. I would read and re-read those things constantly. read the previews and subsequent review of many iconic games in that publication. ‘San Andreas’ preview issue cover art anyone? Classic 😊
I used tp buy physcial games to be able to play them instantly, but now even if i buy a physical game, i still gotta dowbload the whole game plus updates. Truly ridiculous
I got so many great ps1 and ps2 games for cheap at game stop that are worth hundreds now because the company dont know anything about games and back than there were no youtubers hyping up retro games driving prices
Anyone willing to buy an NFT from gamestop of all places deserves to be scammed. What a genius choice, "invest" on a crumbling company.
I remember being a kid, wanting nothing more than to go to a midnight drop but knowing I couldn’t because of school the next day. I always wanted to do it as an adult but by the time I was an adult, there was no need… dang.
Big box stores actually did have trade in programs, for a bit. Walmart, Best Buy, Toys R Us, and a few others entered the market at one point in the late 2000s early 2010s. Hell, even amazon had a program where you could sell your games directly to them. Often, these competitors even offered more than gamestop in trade in value.
I love GameStop it what made my childhood enjoyable.
I still think Game Stop is kinda cool.
It's degraded but it still feels magical coming back to it.
I barely go there because mom.
My friend is a manager at my local GameStop and our Zelda launch was awesome. We had pizza and played Mario kart for about 3 hours until everyone got their game at midnight. Really sucks that corporate seems to crap on all their stores and employees. None of their CEOs for the last 10 years have known anything about video games and can’t figure out how to compete with the direct buy online market or digital stores.
GameStop’s stock thing was solely a product of people being terminally online and paired perfectly with $1,200 stimulus checks.
The whales made a bunch of money off of ‘HODLers’ and rubes who thought they could be retail investors.
You kids all got played
Best I can do is $1.06 for the entire business. Glad they’re failing
They better start making their own console or Gamepass like service now or they're going out of business, not that I'm fond of where things are going either
I go to GameStop because there’s no other choices.
Didn't even scratch the surface of the 2005 to 2010 game library there were so many amazing games!
Way too many ads on this fking video. I’m blocking this channel
it's funny that locally owned video game store are the ones killing gamestop, not the other way around. because you see more locally owned video games stores open up while more gamestop stores shut down
I think Gamestop missed a big opportunity in not becoming more PC hardware focused in the early 2010s. A local PC shop with that kind of focus would've been of good value to console and casual gamers alike wanting to delve into the PC platform. Would've threatened the hell out of places like Best Buy where actual PC gaming hardware would be very limited in selection or curated in a dubious way. Yes, GS would've done some heavy curating, but it would've had some personality through the employees. But you know the employees would've started demanding better compensation for having to become real PC techies.
A Family Video style focus on developing real estate and locations in self owned physical locations would also have been a possible long term solution to survival. Family Video may be dead as a brand, but they owned their own properties allowing them to lease the former FV stores or if needed, redevelop them.
It still depresses me to think about Gamestop. During the Summer of 2020, I saw how low their stock was and nearly put $2000 into it. I figured that it was so low that if they somehow made a comeback, I could make bank on it. Worst case, I lose $2000. Decided against it just because employment wasn't guaranteed at the time. I could have made hundreds of thousands of dollars from selling that stock during the short squeeze. I'm a broke 27 year old so it would've been huge to make that kind of money lol
I know that you can't kick yourself for missing out on huge investment payoffs but this Gamestop stock scenario just hurts to think about because I had everything selected in the app and just had to click confirm 😢
The PS4/Xbox one generation was an absolute joke….. Those things were paper weights…. Kind of like the PS5 and Series X
Peace to Funcoland
My favorite place to shop for used games these days are the real retro stores that go all the way back to Atari instead of just offering current gen and last gen. GameStop can't really just switch to that model since it's too much of a niche business to work with as many locations as they have.
I just go to Retro Game Trader because GameStop doesn’t have what I’m looking for about 90% of the time. Probably because they’re using all their space for toys and funko pops. GameStop needs to remember they’re a game store and not a ToysRUs.
That’s a great photo of Starbucks. 6:34
What's mna?
Y’all are delusional if you think the nft marketplace from GameStop is worth anything. It’s dead. It’s only worth the initial release, capitalizing on hype, greed from day traders, coping crypto bros. There’s absolutely no long term success. (Coming from a crypto/stock trader hence the name)
GameStops most valuable thing for me is used games, trading in games, and there pro rewards membership, as it gives a $5 coupon every month. And if there’s not something you want to buy you can use it on gift cards for later.
This is a fantastic, and fascinating video!GameStop will be missed by those of us who were around in it's heyday. Much like Blockbuster. They had their issues for sure, but it was always a fun experience compared to now. I held out quite some time in physical releases. Only recently buying mostly digital. Sony, Microsoft, and other big publishers have been trying to get rid of game stop for years as they only make money on the initial purchase. I give you, Greed & Capitalism. 😂😢
Damn near everything you said about it being "the Golden age of gaming " shows an incredible amount of ignorance. How old are you, 21?
I remember going to midnight release in Philadelphia for NBA 2K11 ya had to be there man store had like 100+ people there at 12AM
I used xbox 360 from 2012 to 2018 😅
9:13 dunno why i laughed when i saw wild arms
I can’t wait for GameStop to finally die a horrible death so I can drop by to piss on its’ grave. If GS wanted sympathy or loyalty from it’s consumers, it should have given that some thought BEFORE they started screwing us out of our used games and treating us like marks to be fleeced.
Gamestop is a corpse that's shambling if it wasn't for the fraud on reddit it would have died ages ago
Still don't know gamestop would close there website down with stores. They could have replaced the stores with a warehouse. They seem determined to sabotage themselves. The last thing I'd want to do is buy from a website that informs everyone that they are closing. They should have switched to an online business and had a sale.
Loved GameStop and even worked for them. Don’t feel bad for em at all because they did this to themselves
RIP to those classic stores absored by GameStop: Babbage's, Electronics Boutique, EB Games, FuncoLand, Game Champ, and Software, Etc. Sleep easy, old friends.
They are starting to close all GameStop's in Ireland not sure when exactly but majority have closing down sales happening now
Peasant GameStop is doing great it's just the shit games 😂
Gamestop really should to into the retro market. It's already known as a place to sneakily get deals. I know my local shop even has a single shelf dedicated to older games. It's usually only wii u, eii, 3ds and the like, but still they're usually pretty low. I think given their reach, it'd be a profitable point if done right.
Why do I get the sense that this feels like it was made for a class project… Like this seems like something I would have written in middle school or something
Gamestop not offering older/retro games in-store is something that i feel is a huge downfall. Retro gaming has its place and stores exactly for that are sparse (let alone finding a place with a selection of games that have a bigger variety). Idk something ive thought for sometime lol
8:40–9:00 This might just be the most painful segment of video I've ever had to watch.