Gamestop is in trouble. It's been in trouble for a long time now as it bleeds money due to lower hardware and game sales. But the company isn't exactly making things better; higher-ups are panicking, leading to bizarre business decisions that restrict earnings in the long run.
In a new expose from Polygon, a number of Gamestop employees paint a bleak picture for the company's future. The retailer is endemic with strange business decisions that verge on the edge of mismanagement.
Store managers are tasked with lumbering responsibilities that don't actually equate to sales, like pushing phone-trade ins, many of which pester and bombard guests with offers and information. It's like going into a store for a product and only getting bombarded for advertisements for other products, but from an exasperated human who's needlessly stressed. Gamestop has been using its workforce as reverse door-to-door salesman for a while now, but the pressure has apparently gotten worse as Gamestop earnings slip, putting even more weight on managerial shoulders.
The chain is actually withholding inventory to stores. A retail store is reducing inventory of its readily-available products in an effort to push pre-orders, making it kind of psychological; if gamers really want the game, they need to buy it before it's even out.
"Pre-orders are being pushed now more than ever. We have to give every guest a sheet of upcoming games, while they shop, and then report how many of them we pass out daily," a manager told Polygon.
"GameStop is cutting down on inventory, meaning if a guest really wants a somewhat smaller title, they will most likely need to pre-order,."
"They've changed the algorithm. We used to get an extra copy of a game for every three games that were pre-ordered. But now it's more like one extra for every five games pre-ordered."
This inventory slash meant stores simply didn't have enough product to sell during the critical holiday period. This is terrible for individual stores and the company as a whole.
Running a Gamestop store is like being in combat.
You're constantly fighting to persuade people to not only come in, but buy as much gaming hardware, software, accessories, or assorted guff as possible. It's a game that you can't win without being competitive and being creative. But instead of expanding the game or giving stores an edge, Gamestop as a whole seems to want to restrict everything, to make it needlessly harder. If you don't have enough to sell, how can you convince people to buy?
Gamestop has also made a marked shift towards figures, Funko pops, and other gaming collectibles. There's a big reason for that: They keep more from collectibles than they do games.
"The focus shifted from video games to collectibles, because when you sell a new game, it's only like a 20% profit, but collectibles is 50%," an ex-Gamestop manager told Polygon.
Overall the main strategy for Gamestop seems to be trying things until something sticks. But this experimental plan comes at the detriment of its business, the retail industry as a whole, and it's dedicated employees who are tasked with needlessly weighty responsibilities.
Let's hope Gamestop's plan to re-invent itself as gaming cafes works out well...but it could simply be more of the same kind of sporadic decision-making that got it in trouble in the first place.
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