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GameStop Corona Survival

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While its physical doors might be closing for now, GameStop is happy about increasing business. We are all kept at home by novice corona virus and by government orders with sometimes little to do. When work and homeschooling is done and no parties or events are taking place and social connections are limited to the immediate family, what is one to do? Maybe game a little? Many people seem to think so bringing business to GameStop and similar retailers.

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GameStop has closed most of its physical stores around the world, but that doesn’t mean that game buying got completely dried up. On the contrary, online sales are surging keeping bored people sane. Customers flocked the stores right before the closings in anticipation of boredom at home and they are continuing to order online more than before.

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Europe closed earlier, but before then GameStop has seen 2% increase in sales when compared to the same period in March of last year. People are adjusting to life at home and are happy to have some entertainment. Part of March success was the release of Doom Eternal and Animal Crossing: New Horizons. Those two games were highly desired and anticipated. Some experts say that 2% growth with those two games and before home isolation is not as impressive as it should’ve been, but it is still growth.

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The impact of all European and US stores closures is not going to be reflected right away. It remains to be seen if online sales will help offset the losses at least partially. Most closed stores are still operating and are open for curbside delivery or in their case delivery to the door. Such stores are operating with just one employee because it is enough and it is safer that way for everybody involved. Employees mostly volunteer to do this duty and thus don’t feel unhappy.

What’s ahead for the company?

Sadly, most likely, a difficult year is ahead. The trouble started way before the corona outbreak. Winter holiday sales in the last quarter of last year were down 26% and overall 19.4% down for last fiscal year.

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The company closed down 320 stores in 2019 and is looking to close about that much this year. Before the closures, GameStop had about 5,000 stores worldwide. According to company’s CEO George Sherman, the closures were planned as part of “de-densification” program and are not affected by recent low sales. He says the new strategy is going to leave only the most profitable stores operational to reduce cost and improve profits.

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Due to corona’s impact on global economy, projections are impossible to make for all businesses and GameStop is not going to project immediate future earnings. 2020 is going to be difficult and transitional year. Sales might not pick up until late fall when new consoles are going to be launched. So far there are no indications that new Xbox Series X or PlayStation 5 will be affected.

Hopefully the economy will be in the upswing by the end of the year. The positive impact of new game consoles remains to be seen, but there are voices that say that after this is over, people might just be used to downloading new titles from home without visiting physical stores of GameStop and similar. One thing is certain – we all will be changed in some ways, but hopefully for the better.