To some, GameStop is a relic of the glory days of gaming before the arrival of the filthy casuals where true gamers would line up passionately at midnight in the cold and rain to get their hands on the next AAA title. To others, GameStop is a painful reminder of deep losses and a timeless example of the institutional market manipulation between hedge funds and stock brokers. And to a faithful few, GameStop is the superstonk and hodling is the best way to fight back against a game rigged against retail investors. But the real question with GameStop that no one has answered is that beyond the headlines, daytrading, and memes - is there an actual business?
In this episode, we’ll cover the three eras of GameStop - from its dominant control over gaming in the mid 2000’s into an overextended mess throughout the 2010’s and finally to the present day, where the company is deep in a last-ditch-effort to reinvent itself as a tech startup and restore relevancy: diving headfirst into every trend - Web3, blockchain, and NFTs. The fall of GameStop is as much a story about strategic mistakes as it is about market disruption and abandonment.
GameStop enjoyed its most dominant era from 2004 to 2012. From Gears of War and Twilight Princess in 2006, Halo 3, Call of Duty 4, and Wii Sports in 2007, Super Smash Brothers Brawl and GTA IV in 2008, Modern Warfare 2 and Uncharted 2 in 2009, Halo Reach, Starcraft 2, Black Ops in 2010, Skyrim and Dead Space 2 in 2011 are just some of the titles in that 6 year span helped pull gaming into mainstream attention. GameStop was a beneficiary of this golden era, where video games shed their stereotype as obscene, time-wasting button mashers for solitary male teens and into mainstream, mature, cinematic, and interactive entertainment that anyone could enjoy.
In the 2010’s, GameStop entered into its second era - a 6-year plunge downwards of struggle and strife from 2013 to 2019. In response to seeing the studios and publishers moving against them, the company opted for rapid diversification through M&A. The blunder that GameStop made was that all of the companies it acquired (Kongregate, Simply Mac, Cricket Wireless, and various AT&T resellers) were all equally fragile middleman businesses facing the same pressures that were happening in gaming (Adobe Flash games, wireless cellular services, Apple products).
Free of bloat and with a return to gaming - GameStop would now enter its third and present-day era of Web3, led by retail investor cult hero Ryan Cohen. The fundamental problem is that GameStop’s NFT exchange is just one of hundreds floating around these days. New exchanges pop up every month, with some pushed by organizations with greater relevance and penetration than GameStop - like OpenSea, Blur, Reddit’s Vaults, NBA Top-Shop, NFL All Day, Magic Eden, and Rarible.
