Gamestop’s ridiculously low buyback prices for previously used games as well as its questionable marketing and in-store sale techniques may have come back to bite them in its rear end as the nationwide video game retailer has officially announced that it’s dialing back on its efforts to sell the company due to its currently poor financing conditions and low shareholder value. The company that proudly boasts “power to the gamers” is now gradually losing the power of its own and is struggling to appeal to prospective buyers. As it constantly searches for new buyers, it continues to waste away some of its assets in the process. In fact, Gamestop just let go of its Spring Mobile partnership last November, basically selling off the division for $700 million. The sale has completed this month, adding an extra $35 million, but the retailer says that it is likely to use the money to pay off some debt and repurchase market shares. Interestingly enough, the company also stated that part of the $735 million may go toward “core video game and collectibles businesses to drive growth.” Whether the answer is more sale discounts on games or a large influx of Funko Pop figurines, Gamestop needs to act quickly. As a result of today's announcement, its stock has aggressively plunged to about 26 percent, falling to an incredible low of $400 million in market capitalization.
The company also states that it is now on a hunt for a new CEO and is now currently working with a "leading executive search firm."
As Gamestop looks to find someone worthy enough to fill its proverbial giant shoes, we may have to continue to settle for a lot less when we sell our games back to them. It's no secret that part of the reason why their business is reaching a decline is due to their poor in-store business practices, perhaps most egregiously the Circle of Life program that came to light. Here's hoping your new copy of Kingdom Hearts 3 is worth more than $10 once you sell it back to them.
What do you think about Gamestop being unable to sell the company to potential buyers? Is this a good time for other gaming retail businesses to rise up and take the throne? Let us know in the comments below!
