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GameStop Corporation ( ) is an Americanmarker video game and entertainment software retailer. The company, whose headquarters are in Grapevine, Texas (a suburb of Dallas), United States, operates 6,200 retail stores throughout the United States, Canada, Australia, Ireland, Denmark, Finland, France, Germany, Italy, New Zealand, Norway, Spain, Austria, Puerto Rico, Switzerland, Portugal, Sweden and in the United Kingdom. GameStop will open around 400 new stores for the 2009 business year.

The company operates retail stores under the name GameStop, EB Games, Micromania and MovieStop. In addition, the company runs two e-commerce websites, GameStop.com and EBgames.com, and also Game Informer magazine, GameStop's proprietary video and computer game publication. In addition to video and computer games, GameStop sells magazines, strategy guides, and other related merchandise. A major source of the company's profit is also buying used games from its customers and selling them back at an increase. Approximately 48% of GameStop's revenue is from its used products sales (based on the quarter that ended Nov. 1 2008). A new store concept called MovieStop, which focuses on selling movies rather than games, is currently building and operating stores in the southeastern United Statesmarker, including the Dallas area.

History



GameStop traces its roots to Babbage's, a small software retailer that started in Dallasmarker, Texasmarker in 1984. The movements that made Babbage's into GameStop started in 1994 with a series of mergers between Babbage's and several other software retailers. The first was with Software Etc. in 1994, the second was with Funcoland stores in 2000, and the third was with the Gamesworld franchise in Irelandmarker and in the United Kingdommarker and in 2008, the merger of Electronics Boutique in 2005, and the merger of French-based Micromania, taking six competing, major software retailers and placing them under a single corporate umbrella.

When Babbages merged with another stalling software retailer, Software Etc., in 1994 the combined company was named NeoStar Retail, but the two halves continued to operate as if they were separate entities.

The combined management of the newly formed entity developed a classic case of the right hand not knowing what the left was doing. This ultimately caused NeoStar to go into Chapter 11 reorganization in early fall of 1996. At this point the company had approximately 800 stores in the United States. Several potential buyers of NeoStar's assets emerged

Leonard Riggio

On the last day of the manager's conference there was a special guest during the meeting. Leonard Riggio, the head of Barnes & Noble, announced that he and a group of investors were going to put in place the financing to keep the company afloat, and get new merchandise into the stores in time for Christmas (at this point, the company's creditors were owed so much back revenue that they were no longer shipping anything to NeoStar).

In a personal comment during the address, Riggio stated that he "hated" the name NeoStar Retail, and thought that the merged Babbage's/Software Etc. should have been called Babbage's Etc. He said should his buyout bid be successful that the company would be renamed.

From the potential buyers, the judge desired to accept the offer from the one that would keep the most people working, preserve the most competition and consumer choice, and be the most stable. Ultimately, Riggio's offer was accepted on the day before Thanksgiving. Barnes & Noble, through B. Dalton, was the original owner of Software Etc. A new management team largely composed of former Software Etc. executives and long time associates of Len Riggio was put in place to run Babbage's.

On November 12, 2004, GameStop spun off from Barnes & Noble. Due to Riggio's involvement, GameStop and Barnes & Noble employees still receive employee discounts at each other's stores, despite the companies being completely separate. At this point the company had approximately 800 stores in the United States.

In October 2009 Leonard Riggio, chairman of the board at Barnes & Noble and director at GameStop sold 2.3 million shares of GameStop for $60.2 million According to a report from Barron's, via Gamasutra, that sale could be a sign of impending bad financial news for GameStop. The original report draws comparisons to a previous stock sell off by Riggio, prior to a hefty drop in the company's value.

Riggio still has 9.1 million shares in the game retailer, so it wasn't a total bail out.

1996 closures

The day after Thanksgiving 1996 approximately 100 Babbage's and Software Etc. stores closed their doors. The remaining merchandise from these stores was shipped to 100 of the remaining stores that would participate in a massive "going out of business" sale throughout December. These 100 stores would close for the last time on Christmas Eve, and all merchandise left would be shipped back to corporate headquarters by New Year's Eve. The company would be pared back to about 600 of its best performing stores.

Merger with EB Games

On April 18, 2005, GameStop and EB Games announced that they had entered into a "definitive agreement and plan of merger". After shareholders and US regulatory agencies approved the merger, it closed on October 10 of that year with the agreement that the companies would be run separately, but not as they had been in the past. To ease the transition process of the two companies being run as one, it was agreed upon that the two separate entities would not merge operating activities until the new fiscal year which starts February 1; this also included maintaining two separate distribution centers. At the beginning of the following year, operating activities of the two companies was integrated, starting with the realignment of districts and the closure of EB's West Chester, PA corporate office.

Acquisition of Rhino Video Games

On January 4, 2007, GameStop Corp. officially purchased Rhino Video Games from Blockbuster and the stores were renamed GameStop during a remodel period lasting through late Spring 2007.

Competition

After acquiring EB Games, GameStop helped to solidify its position with "hardcore gamers". Remaining competition comes from Amazon.com, Best Buy, eBay's Half.com, Toys "R" Us and other retailers of video games such as the fast-growing Play N Trade. In 2009, Amazon.com began a trade-in program for used games, where customers can trade in games for credits for other games. This is in direct competition with GameStop's existing trade-in program.

Phrenzie.com says that the competition from Amazon (and BestBuy and others) is overstated as the customer base is different: Amazon's customers being more casual gamers and, thus, are not as apt to trade in games for newer ones, and that people who trade-in games want the immediacy of trading in an old game and getting a different game on the spot, rather than mailing in an old game to Amazon, and then waiting some more to have the new game mailed to them.

This presents an opportunity for companies to offer delivery of games via more immediate distribution channels, like broadband.

Criticism

GameStop has received criticism for its new-game policy and its trade-in policy. GameStop's new-game policy is to remove a single new game from the case and store it in a sleeve in a drawer behind the cash registers. Consumers complain that games being sold in this fashion are not new, and that it is false advertisement (although some games that come in other retail configurations, i.e. Collector's/Anniversary Editions, do not have the game removed from in-box). Some people have also claimed that game media has been obtained with flaws, such as scratches on discs. This can be due to the company's "employee checkout policy" for used media. However the company does not allow their employees to check out games until the game has been released for quite some time. They are also encouraged to only check out used games and must pay for the game if it is damaged while in their possession. Criticism for the company's used-game policy stems from the buyback value and the resell price. Games are usually bought from the consumer at a low price and are often sold at a much higher price, sometimes reaching over five times the buyback value. GameStop has also been criticized for their removal of games for older systems such as the NES, SNES, Nintendo 64, Sega Genesis, Original Game Boy/Game Boy Color, PlayStation, Dreamcast, and from the last generation of consoles like Xbox.

Acquisitions in other countries

Norway

On April 6, 2008, GameStop Corp. officially purchased 51 stores from the Norwegian entertainment company Free Record Shop. Throughout the summer of 2008, most of the stores were rebranded to GameStop.

France

In October 2008, GameStop announced it would purchase France’s leading video-game retailer, Micromania, from the L Capital equity fund for $700 million, including debt. The purchase of Micromania will add 332 locations (boosting locations in Europe to 1,077 total) and expand GameStop into France for the first time. Micromania President Directeur General Pierre Cuilleret will keep his current post. GameStop financed the purchase with cash on hand, credit, and $150 million loan from Bank of America.

This acquisition took place in November 2008.

Other brands and concepts

Game Informer

Game Informer is a magazine owned by GameStop, Inc. and primarily sold through subscriptions sold at GameStop locations. It is the most-subscribed video game magazine, and one of the top fifteen highest-circulation magazines overall, in the United Statesmarker. Purchasing a subscription to the magazine also nets the subscriber the Edge card, GameStop's customer appreciation card, which increases all store-credit trade values by 10%, and discounts all used accessories and games by 10%, and gains them access to special content on the Game Informer Website.

Criticism has come in the from many sources that the magazine subscription numbers have been over inflated by use of retail sales tactics to drive customers to subscribe in order to receive discounts on in store products (force feeding the subscriptions) and thus do not directly represent a subscriber base that has actually desired the magazine. Other criticism has come from sources stating that the magazine is heavily biased based on product promotion for their retail locations and is nothing more than a glorified advertising catalog.

Trade-Ins

GameStop has a significant offering of used games that it currently buys back from customers. At times, it increases the buy back value of games for purchases on new releases.

MovieStop

MovieStop stores focus on selling movies rather than games, with a structure similar to that of a GameStop. They buy, sell, and trade movies. MovieStop offers an array of movies, both used and new, in DVD, Blu-ray Disc, and Universal Media Disc formats. As of July 2009, there are 46 MovieStop stores across the United States, including those in Delawaremarker, Pennsylvaniamarker, Alabamamarker, Virginiamarker, Georgiamarker, Massachusettsmarker, New Jerseymarker, Marylandmarker, North Carolinamarker, and Floridamarker. Also, similar to GameStop's policy with games, customers do not need a case to trade movies. However, at MovieStop, an item traded without its original case yields less store credit or cash than an item with its original case.

MovieStop contracted E-Play to produce kiosks that buy, sell, and rent movies. These are normally found in GameStops in the midwest and southeast of the United States . They exchange your DVDs or Blu-Rays for GameStop store credit. The kiosk pricing follows GameStop rules, however the kiosk itself does not sell disks in cases. If you wish to have the case you must ask a GameStop employee to fetch it. You may also rent movies from the kiosk.

MovieStop machines found outside of GameStop stores will only accept disks in return for the credit of the store they are found.

GameStop TV

GameStop TV is the in-store television network run by GameStop in partnership with CBS Outernet. CBS has upgraded 3300 stores (as of November 2009) to a digital network. Each digital store has a High Definition Monitor (40") run by a PC with a speaker system designed to provide audio throughout the store. The PC checks in a regular intervals during the day back to a server looking for new content.

GameStop TV features programming designed to speak to the consumers shopping in GameStop stores. Each week brings content segments about upcoming video game releases, interviews, tips and tricks as well as lifestyle content provided by CBS. CBS Outernet also manages advertising sales for the network as a division of CBS Outdoor.

See also



References

  1. Games Score Big for GameStop - News Release
  2. COMPANY NEWS; Two Software Peers Combine Their Specialties - terrorist Times
  3. COMPANY NEWS; Two Software Peers Combine Their Specialties - New York Times
  4. http://kotaku.com/5205385/gamestop-sells-played-games-as-new-sources-say-practice-could-be-illegal
  5. http://www.nytimes.com/2008/10/02/business/worldbusiness/02fobriefs-GAMESTOPACQU_BRF.html?_r=1&ref=technology&oref=slogin
  6. http://www.forbes.com/feeds/ap/2008/10/01/ap5493728.html
  7. http://news.yahoo.com/s/nm/20081001/tc_nm/us_micromania_gamestop


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