I recently watched a video by Terros Kid and he had some great points talking about the GameStop stores that were closing. As I was watching the video (and agreeing with most of what he was saying) I had to chime in with my opinion as a gamer and as a business enthusiast. You can watch his video below:
So if you’ve seen the recent Polygon article, Gamestop is closing 150+ “non-productive” stores due to low holiday video game sales. GameStop blames the end of the console cycle for the low sales, “the video game category was weak, particularly in the back half of 2016, as the console cycle ages.”
Are we really shocked by this? And is it really because we’re at the end of the console cycle? In my opinion, no at all.
It’s just an excuse for a business that hasn’t adapted to the market, is losing to players who aren’t even in their niche, and frankly, don’t treat their customers very well.
What’s really funny about all of this is that GameStop has the audience, the capital and the know-how of getting back into the scene but out of sheer hard-headedness, they refuse to adapt and get with the times. There are three main reasons why Gamestop is losing.
#1 – GameStop Isn’t Practical About Their Market
GameStop (and EB Games here in Canada) is not practical when it comes to the market of used games. They’re a business that only thinks of the bottom line and you can see that in their business practices and customer service (which you can read about further down). I used to be on GameStop’s side. I used to want to support their business as a fellow gamer. But when you spend $90 on a game and decide to give it back to them for re-sale (in support of a brethren gaming organization) and they offer you $10 to $15 for it? It’s just not practical. GameStop is being
GameStop is getting beat by Kijiji, Ebay, LetGo, Craigslist, hell they’re being beat by my own damn contacts list on my phone (hold on while I call up my buddy Gary and sell him this copy of Doom for $30).
If GameStop really wants to play this buy and return game, they have to start playing at the same level as everyone else. And right now they look like a pee-wee team taking on the Chicago Blackhawks.
#2 – GameStop Isn’t Adapting To The World Around Them
The world is digital. Plain and simple. In my last semester of university, I went 100% paperless. We have that ability now and the only reason physical copies of games exist is because human beings are collectors and they like to hold the things they love in their hands. But again, this just isn’ practical. GameStop hasn’t adapted to the changing market and they’re losing to Steam, Xbox, PlayStation, the App Store and whatever else sells digital games.
GameStop is sticking to their guns and providing a service to facilitate the exchange and purchase of physical copies of used video games in a digital world.
The best part?
It is possible.
Look at Amazon or Ebay. Look at Bestbuy or Walmart. In the time it took to order this I could’ve bought 10 to 20 games without having to hear one more pitch to sign up for their loyalty program (and don’t even get me started on their loyalty program). GameStop is losing to everyone doing it better who aren’t even in their niche because they’ve failed to adapt to the world around them.
#3 – GameStop Alienates Their Customers
GameStop is a business that only thinks about their bottom line. I know this because you see it in their promotions and through their employees.
Now I’ve rarely had a good experience in a GameStop. The cashiers aren’t very friendly and they’re always trying to upsell you on something. Even their employee incentives are scummy. In a recent article by Kotaku, a GameStop employee admitted to lying to customers about their stock of new games in order to push used games. How’s that for making your customer feel at home. Lying about what they want to give them something they don’t want because it’s better for the bottom line. I’m not saying GameStop trained there employee’s to do this. I’m saying they created an environment where employees were motivated to do so.
I’ve even had personal conversations with an ex-co-worker who used to work at an EB Games. He always used to say “customers would come up to me and want to talk about the newest video game. Like man, I don’t care about what games you’re playing I’m just trying to work.” I’m definitely not saying that this is the attitude of every employee there. I’m sure most of them loving talking video games. But if you were to get the one employee who makes you feel like you don’t belong in there, among the stuff that you love and have paid you hard earned dollars for, the store would be dead to you forever.
Imagine owning a game’s store and NOT talking to you customer about the games they like? That’s a great way to alienate your customers, let alone lying to them about your stock.
If GameStop really want’s to survive, their needs to be some major changes.
1 – Become THE online retailer of used games. Without the need for physical locations, your overhead will be lower, use that saved money to create the infrastructure needed and start facilitating the sale of used games online. GameStop has the audience, they just need to give them what they want.
2 – IF you’re going to encourage people to return their games, pay your customers a fair price. Offering $15 to $20 dollars for a game I know you’re going to turn around and sell for $60 to $70 dollars is a slap in the face. Rethink your margins.
3 – Actually be nice to your customers. How easy is it to walk up to a gamer and say “hey, what games have you been playing lately?”. That can EASILY be an hour long conversation that sets the foundation for a relationship. You catch more flies with honey than with some half-assed “loyalty” program you’re going to make me pay for.