Physical games don't matter to GameStop, CEO says

GameStop has uniquely insulated its business against disruptions in the retail software sales chain by necessity, and Sony's recent business decision to cut physical PlayStation game disc production has no real effect on GameStop's operations, current CEO Ryan Cohen says.

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GameStop CEO Ryan Cohen wants to buy eBay for $56 billion and create an ultra-synergized e-commerce marketplace. The idea is to combine the strengths of eBay and GameStop together to sell games, collectibles, merch, and even establish an in-game digital store.

With GameStop having moved away from actual game software sales some time ago, instead embracing the highly-profitable world of collectibles like Funko Pops and Magic and Pokemon cards, Sony's recent decision to kill off PlayStation game discs won't cause anything but small chip damage to GameStop's armor rating. The retailer once relied on second-hand game sales to stay afloat, but those days are long gone.

In a recent interview with Bloomberg, GameStop CEO Ryan Cohen briefly commented on Sony's controversial decision, and how the 10th console generation is believed to be a digital-only affair. Cohen is unfazed by the news:

"It doesn't matter, it doesn't matter at all. It mattered in the past. Software today makes up less than 12% of the business, and collectibles make up more than half the business. It is totally, totally irrelevant," the CEO said.

Frequently Asked Questions

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Question #1

How will Sony's decision to stop producing PlayStation discs affect GameStop's software revenue given software is now under 12% of its business?

According to GameStop CEO Ryan Cohen, Sony’s move to stop producing PlayStation discs will have no real effect on GameStop’s operations. He said software now makes up less than 12% of the business while collectibles account for more than half, so the decision is "totally, totally irrelevant."

Answered

Question #2

What role do collectibles play in GameStop's current business model and how much of revenue do they generate according to the article?

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Question #3

Does the article indicate GameStop still relies on used game sales, and if not, when did that change?

The article indicates GameStop no longer relies on used game sales, stating the retailer "once relied on second-hand game sales to stay afloat, but those days are long gone." It says GameStop moved away from game software sales "some time ago" and that "software today makes up less than 12% of the business," but it does not give a specific date for when that change occurred.

Answered

Question #4

What did Ryan Cohen say about the relevance of physical games to GameStop's operations?

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Elsewhere in the interview, Cohen discusses using GameStop's nodes to facilitate some sort of business with content creators, which could lead to more brand deals and direct product placement opportunities as well as direct merch.