Before the novel coronavirus outbreak, things were looking pretty bleak for veteran video game retailer GameStop. Things weren’t looking much better during the initial stages of the lockdown either as the company classified its workers as essential, drawing stark criticism from multiple segments in society. But things are starting to look up for the company recently and in a quite unexpected way.
The general prosperity that is visiting the video game industry right now is also spending some time at GameStop, and its sales are through the roof because of it. Then again, video game industry sales are at a decade high right now broadly speaking, so it would be somewhat condemning if traditional retail missed out on this entirely.
But GameStop isn’t just selling a few things here and there, it’s online sales have shot up some 1500 percent. Given that many people have identified the company’s main problem as being the major transition to online sales and digital products, this shift could bode well for the company’s longterm health. That longterm health is something that many in the industry and on Wall Street have questioned for some time.
A popular punching bag culturally and a battered stock from a trader’s perspective, GameStop could be the comeback story of the decade if this trend continues.
You don’t have to take our word for it though. GameStop’s digital game sales operation have lagged behind industry leaders Apple and Best Buy. However, that all changed in March as GameStop toppled both of those titans to assume the lead. Business Insider doesn’t mince words either when they credit the Switch and its massive sales for this reversal in March.
Will it last? Probably not, but GameStop could leverage its Switch sales dominance into other areas.
All of this brings some interesting questions to the forefront such as the extent to which GameStop is buoyed by Nintendo’s unique approach with the Switch. Additionally, it remains to be seen how the company will be impacted by any changes in the way the Big N does business in the future. Many people point out that the major selling point of Nintendo’s hardware is the software that comes with it.
Though many “experts” want Nintendo to port Mario to everything, we don’t see that becoming a reality. But we’d be naive to think that Nintendo won’t try to move all or most of its game sales online like everyone else at some point in the future. Would that spell doom for GameStop finally? It’ll be an interesting story to watch from here on out.
What do you think of GameStop’s record sales during the COVID-19 pandemic? A nice breather for a beleaguered company or a brief respite from an inevitable collapse? Let us know your thoughts in the comments section below.
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Source – Business Insider