GameStop In Talks with Buyout Firms

cageymaru

Fully [H]
Joined
Apr 10, 2003
Messages
22,054
GameStop has allegedly been linked to talks with Sycamore Partners as the private equity firm has expressed interest in the company according to Reuters. Anonymous sources have been quoted as saying that GameStop has now hired a financial adviser to assist in the discussions. The past year has been a tumultuous time for the company as their CEO J. Paul Raines stepped down late last year due to medical reasons and passed away in March. His replacement, Michael Mauleronly, only lasted three months on the job before resigning for personal reasons leaving the leadership of the company to former Microsoft XBOX executive Shane Kim.

I wonder how GameStop's business model will continue to be profitable in the new digital video game economy. Microsoft's XBOX and Sony's Playstation both have digital downloads services for new games and have bundled their respective older titles into paid monthly streaming services. I think their best bet is to reinvent themselves as the Netflix of game streaming and use that company's business model of charging a monthly rental fee for physical discs exchanged through the Post Office.

The retailer’s stock has slid more than 32 percent over the last 12 months, bringing its market capitalization to $1.42 billion, down from about $9.4 billion in 2007.

While its used-game niche has helped the company, this model has also been challenged as games developers including Electronic Arts Inc, Sony Corp and Microsoft Corp have each launched plans to offer monthly streaming services for many of the older titles they own.
 
They could also go they way of a Loot crate type of thing and offer game related merch per month or a online site for everything game related merch if they can. I really don't ever see them being as big as they were 10 years ago.
 
With everything going digital over time, not the reverse I sure wouldnt invent in a store like that. Next gen consoles are likely the last for physical media. I predict streaming set top boxes after that, with on-live like streaming and library management.

On-Live was really ahead of its time and the world was not ready for it yet.
 
With everything going digital over time, not the reverse I sure wouldnt invent in a store like that. Next gen consoles are likely the last for physical media. I predict streaming set top boxes after that, with on-live like streaming and library management.

On-Live was really ahead of its time and the world was not ready for it yet.

I use both a Steam Link and Moonlight (opensource GameStream for nVidia cards) and they both work great...for single player/non-multiplayer games. If I try anything with online capabilities...The Division, Destiny, Battlefield, etc....the experience is terrible. They is to much lag between input and whats displayed on the screen and what im pressing on my keyboard and mouse. Im not sure any break thru in technology can overcome this kind of lag. With games moving to a "always online" model (The Division, Destiny, Fallout, State of Decay 2), etc....not sure if streaming is going to work that well. If it does and the input lag issues are resolved...then great.
 
They could also go they way of a Loot crate type of thing and offer game related merch per month or a online site for everything game related merch if they can. I really don't ever see them being as big as they were 10 years ago.
They already do. It's called ThinkGeek. Gamestop acquired them in 2015. They even offer loot bags via a subscription service.
 
  • Like
Reactions: Rahh
like this
So translation.

Game stop has more than zero value, but no viable business. So they will sell it to a private equity firm who will buy it becuase they believe it is helthy enough to load up with debt. They will then run off with that borrowed money and leave the corpse to die.

Maybe at that point someone will buy the name in bankruptcy proceedings and glue it to something else.
 
So translation.

Game stop has more than zero value, but no viable business. So they will sell it to a private equity firm who will buy it becuase they believe it is helthy enough to load up with debt. They will then run off with that borrowed money and leave the corpse to die.

Maybe at that point someone will buy the name in bankruptcy proceedings and glue it to something else.

That sounds about right to me. The funny thing is though, for most of us Game Stop has a negative connotation. So attaching it to something later will only do that entity harm IMO. It's not like taking the name Prey from a popular 2006 game and putting it on a cool new game from 2016. (not that anyone liked that name gluing either :D ) It's like slapping Comcast (assuming Comcast died) onto an excellent new restaurant. People would love to eat there, but they see Comcast, and run! :p
 
So translation.

Game stop has more than zero value, but no viable business. So they will sell it to a private equity firm who will buy it becuase they believe it is helthy enough to load up with debt. They will then run off with that borrowed money and leave the corpse to die.

Maybe at that point someone will buy the name in bankruptcy proceedings and glue it to something else.
I hear a spot recently opened with Bain Capital.
 
Last edited:
So translation.

Game stop has more than zero value, but no viable business. So they will sell it to a private equity firm who will buy it becuase they believe it is helthy enough to load up with debt. They will then run off with that borrowed money and leave the corpse to die.

Maybe at that point someone will buy the name in bankruptcy proceedings and glue it to something else.

Pretty much. The debt will hold some value short term. I wouldn’t want to be an equity holder though.
 
That sounds about right to me. The funny thing is though, for most of us Game Stop has a negative connotation. So attaching it to something later will only do that entity harm IMO. It's not like taking the name Prey from a popular 2006 game and putting it on a cool new game from 2016. (not that anyone liked that name gluing either :D ) It's like slapping Comcast (assuming Comcast died) onto an excellent new restaurant. People would love to eat there, but they see Comcast, and run! :p

I've been picking the bones on clearance items and really old titles for a buck or two. I don't have a bad opinion, I just think they are a bad business model. Brick and Mortar for electronics, software, and gadgets are futureless. Everything is going online.
 
I've been picking the bones on clearance items and really old titles for a buck or two. I don't have a bad opinion, I just think they are a bad business model. Brick and Mortar for electronics, software, and gadgets are futureless. Everything is going online.

Yeah, you can occasionally find something like that there. I agree though with the online sentiment. I'll order hardware online, and buy my games digitally. It's so much easier.
 
IMO GameStop could survive if they did a massive business model shift and turned their stores into like a pub arcade type of thing.

That being said I doubt their board is smart enough to allow such a giant shift.
 
IMO GameStop could survive if they did a massive business model shift and turned their stores into like a pub arcade type of thing.

That being said I doubt their board is smart enough to allow such a giant shift.

Yeah, it would take something drastic like that. Which, boards, investors, equity firms, etc. are not exactly famous for.
 
So what does Gamestop actually have that some firm would want to buy it? A store front that sells new games? Yeah you don't need to buy that, and if that business model really worked well Gamestop would not be in need of a buy out. The name? The customer records? There's no real reason to buy a failing company that doesn't have anything worth buying, no IP, no manufacturing, nothing except old games that no one wants to buy anyways.
 
So what does Gamestop actually have that some firm would want to buy it? A store front that sells new games? Yeah you don't need to buy that, and if that business model really worked well Gamestop would not be in need of a buy out. The name? The customer records? There's no real reason to buy a failing company that doesn't have anything worth buying, no IP, no manufacturing, nothing except old games that no one wants to buy anyways.
Real estate, good will, sales and shipping infrastructure...
 
I've wondered how Gamestop stayed afloat for this long. Their buy and sell games used business was just ridiculous. After looking at the prices they charge for a 2 week old game versus a 2 year old game its insane, the buy back prices is criminal. They would buy your used game for $3.25 and then turn around and sell that very game for $20-$30. It was just a grimy business and I never went back. I pre-ordered Deus-Ex Human revolution there and then found out they "didn't have it in the store" because they were fighting with the publisher over the online gaming service coupon inside. That left a bad taste in my mouth after that and stopped doing business with them after that. Plus the fact they never hard and AAA title PC games on the shelves, it was all console gaming stuff. You actually had to order it online and have it shipped to the store for them to actually carry PC games. That told me right there they did not care about PC games at all.
Can't say I didn't see their demise coming from miles away.....
 
Does Sycamore Partners have to get a pre-order in for the buy out? (Though it comes with a GameStop Exclusive Funko pop, two store maps, and starter accounting battle pack!)

Funko is rumored to look like this:

upload_2018-6-19_13-38-22.png
 
Last edited:
So what does Gamestop actually have that some firm would want to buy it? A store front that sells new games? Yeah you don't need to buy that, and if that business model really worked well Gamestop would not be in need of a buy out. The name? The customer records? There's no real reason to buy a failing company that doesn't have anything worth buying, no IP, no manufacturing, nothing except old games that no one wants to buy anyways.

With the end of toys r us, gamestop has what seems to be the only physical retail presence for collectibles and memorabilia for video games and a bunch of geeky stuff. They also own think geek.

Not that they can save the company, but they are likely on some spectrum of viable in the near term. They will likely get hosed along with the rotting corpse of game stop proper.
 
With everything going digital over time, not the reverse I sure wouldnt invent in a store like that. Next gen consoles are likely the last for physical media. I predict streaming set top boxes after that, with on-live like streaming and library management.

On-Live was really ahead of its time and the world was not ready for it yet.

Yup. I don't mind Gamestop, it is nice to have a video game store locally. But for consoles or physical games Walmart, Target and whatnot have the big ones covered. The niche ones can be handled via Amazon in general. With Microsoft heavily investing in the cloud I do strongly believe down the line Xbox will turn into a streaming only device. Meaning you don't download games, but stream them (even SP games). They're already toying around with it, such as Titanfall 2 in some aspects. Microsoft is clearing moving to a service model on all fronts, with Windows, Office, and obviously LIVE being a big one. It wouldn't surprise me if they move further in that direction. That alone would be a big blow to any video game related store.
 
I actually think Gamestop could survive if they became a positive, friendly place where you get a personal touch from experts, and a fun atmosphere. Unfortunately, most Gamestops are the POLAR OPPOSITE.
 
Wasn't it Gamespot that bought Impulse from Stardock? I better check. There are a couple of games I like there. Like Sins of a Solar Empire.
 
I actually think Gamestop could survive if they became a positive, friendly place where you get a personal touch from experts, and a fun atmosphere. Unfortunately, most Gamestops are the POLAR OPPOSITE.
All Gamestops are now run like pawn shops, and the staff are only reflective of the way they're treated by management. I've had really positive experiences at several store more than 10 years ago, and one local one up until about 3 years ago. The push to sell used games, subscriptions and credit cards destroyed them.
 
With the end of toys r us, gamestop has what seems to be the only physical retail presence for collectibles and memorabilia for video games and a bunch of geeky stuff. .
Target/Walmart doesn't sell that stuff? If not, so Gamestop basically became the "comic book store"

Curious how much people really care that much about retail anymore, amazon, click click, 2 days later done.
 
Target/Walmart doesn't sell that stuff? If not, so Gamestop basically became the "comic book store"

Curious how much people really care that much about retail anymore, amazon, click click, 2 days later done.
You don't use one-click purchasing?
 
There's a market here, it just needs to be compressed enough to be viable. Some sort of "Barnes AT&T Bed Game and Radio Stop Shack and Beyond" (with Pretzel Cookie Haus).

I'd go in just for the liquid butt soap and a latte.


P.S. "Excuse me, I need a bottle of Wintergreen Springs Liquid Butt Soap, some Panasonic 10mW carbon film resistors, an urban camo Fresh Prince t-shirt and a veggie-turkey dried tomato Chapati wrap."
 
Last edited:
So translation.

Game stop has more than zero value, but no viable business. So they will sell it to a private equity firm who will buy it becuase they believe it is helthy enough to load up with debt. They will then run off with that borrowed money and leave the corpse to die.

Maybe at that point someone will buy the name in bankruptcy proceedings and glue it to something else.
The American Dream.
 
I was in a different part of town recently. I actually drove by a store that still rents VHS and DVD movies. WTF? I couldn't believe it. First time I've seen one of these stores in maybe 10+ years?
I think GameStop is destined for the same future. Times change. Move on.
 
Gamestop will go the way of Blockbuster. The consoles are finally catching up to the PC with digital distribution. Their business model has become irrelevant.

Any time I've walked or driven by a Gamestop in recent years, the places are ghost towns. I never see anyone inside them other than the people working there. I have no idea how they stay open.
 
Last edited:
I keep reading claims of physical is eol and this is the last physical console generation. Yet another console gen is coming and will have physical and likely the one after that and frankly probably the next also. Why? Because despite what those who live in a reality distortion bubble believe, the majority of people, especially in the us do not have good internet and that isn't likely to change for at least a couple decades.
 
Used to work IT Support for their stores and dealt with their corporate many times, most of the dealings with their corporate office were less than pleasant. Good riddance.
 
You don't use one-click purchasing?
Due to the number data breaches and what not... I like to not keep my credit card info online even if it means having to reenter it every time... plus I have a kid who's young enough to be click happy with a mouse even when I'm not around, but not old enough to know something you don't do.
 
Due to the number data breaches and what not... I like to not keep my credit card info online even if it means having to reenter it every time... plus I have a kid who's young enough to be click happy with a mouse even when I'm not around, but not old enough to know something you don't do.

I enter mine every time too. I actually know it now so I don't even have to pull the card out anymore.
 
Back
Top