GameStop Thinks It Can Challenge Amazon

Tsing

The FPS Review
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Image: GameStop



Does GameStop have what to takes to compete with the world’s biggest online retailer? That’s what its executives seem to think after selling a significant stake to Ryan Cohen, an entrepreneur who’s responsible for successes such as Chewy.com.



Shares jumped as much as 28 percent following a report from Bloomberg this week, which revealed that Cohen had some kind of epic plan for taking on Amazon. While many of those details are still under wraps, GameStop has leveled up in the stock market and is definitely in the best place it’s been since 2018.



“Cohen’s vision, which isn’t yet public, is to broaden GameStop’s online selection and compete head-to-head with some of the biggest e-commerce companies,” Bloomberg reported. “Rather than just offering video...
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Not gonna lie. If I'd been drinking something at the moment I read that headline I would've spit it all over the screen laughing. However, I do think closing most physical locations to transition to a more digital based company could be the answer but Amazon, nope! At least not right now anyways unless they can secure some pretty amazing deals with vendors and I doubt that.
 
So let me make sure I understand. Gamestop who's highest margin sales are of video games they bought acting as a video game pawn shoppe wants to compete with the likes of Amazon who has such breadth of market and product they refund more in a week than gamestop makes in a month... thinks they can obtain the level of mindshare and use that Amazon has?

Gamestop by anyone in the know is where lonely teen nerds go to talk video games. And they only get new games after trading in a stack of old video games thy purchased at garage sales and online auctions.
 
Let's think about 4D chess though. What does Amazon do companies that it perceives to be a threat to them? Either bully them or buy them. If they buy GameStop for more than they are worth, then the execs just did their jobs properly for the shareholders....
 
David_Schroth said:
Let's think about 4D chess though. What does Amazon do companies that it perceives to be a threat to them? Either bully them or buy them. If they buy GameStop for more than they are worth, then the execs just did their jobs properly for the shareholders....
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Yeah but I think Gamestop has to do a whole lot more than just say they can challenge Amazon before they would be perceived as a threat. Gamestop has nothing up it's sleeve right now that I'm aware of, and I can't think of anything it brings to the table that even remotely challenges anyone right now. It's a B&M operation dealing in physical products that have gone almost entirely digital now. The only shocker is that it didn't dry up and blow away at the same time that Bookstop, Borders, Waldenbooks, Circuit City, CompUSA, etc. all did.

Not even major chains are immune - mall anchor stores are starting to drop now: Sears, JCP, etc.

I mean, Amazon probably blew more money on Lumberyard and Luna than Gamestop is worth. The only thing that Gamestop has that Amazon doesn't necessarily do better (although they do already do it) is trade in the gray physical game market. With digital downloads and account-locked DLC, the value of that business has been in steep decline for years, and Gamestop hasn't really been successful in trying to diversify away from it. There was a bright spot there in 2015-2018~ish with the toy-game thing (Skylanders, Amibo, etc), but that proved to be just a fad and is pretty much done and gone now.
 
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