GameStop is done looking for buyers, citing ‘lack of available financing’

Amanda Farough, Wednesday, January 30th, 2019 8:47 pm

GameStop has taken itself off the market, and not because it’s getting married to another corporation or it wants to go steady with a big box retailer. The once megalith video game retailer and reseller has given up on finding a reasonable buyer to help eke its way out of the grave (though it’s been one foot in for a number of years). Not even ThinkGeek’s high quality merchandise, Funko Pops, or the occasional board game has been able to reroute GameStop’s inability to evolve with the times.

Unfortunately, GameStop hasn’t clarified what this means for the future of the company, including its subsidiaries like ThinkGeek and GameInformer. Analyst firm, Wedbush Securities, is under the impression that this may not be all that bad for GameStop in the future.

“GameStop should be a primary beneficiary from the console refresh in 2020 or 2021, and it remains the dominant force in the video game industry’s pre-owned segment,” Wedbush analysts said.

Source: CNBC
Source: CNBC

While physical game sales have been an important marker in sales, digital is becoming more and more of a dominant force in how consumers purchase their games. Going into a GameStop (EB Games, if you’re in Canada) feels antiquated. Consumers have become used to picking up games from Amazon (when Twitch offered its discount) or purchasing directly from a console (or PC) platform.

Previously, GameStop had been courting a deal with private equity firm, Sycamore Partners, way back in June 2018. If the company survives until 2020 or 2021, then Wedbush might be onto something. New consoles means that old consoles (and their physical game libraries) will be traded in for the new hotness, bringing in fresh trade-ins for GameStop to sell at discounted (though not as discounted as they were purchased for) prices to consumers.

GameStop’s shares are continuing to plummet and the board of directors can’t come to a consensus about terms for equitable financing. So, 2019 is looking grim for everyone’s love to hate game retailer. © 2024 | All Rights Reserved.