|Traded as||NYSE: GME
S&P 500 Component
|Founded||1984 as Babbage's
Dallas, Texas, United States
|Headquarters||Grapevine, Texas, United States|
|Number of locations||6,627 (2012)|
|Key people||R. Richard Fontaine
J. Paul Raines
|Revenue||US$ 9.078 billion (2009)|
|Operating income||US$ 637 million (2009)|
|Net income||US$ 377 million (2009)|
|Total assets||US$ 4.955 billion (2009)|
|Total equity||US$ 2.723 billion (2009)|
|Employees||17,000 full-time (2009)|
The GameStop Corporation NYSE: GME is an American video game, consumer electronics, and wireless services retailer. The company is headquartered in Grapevine, Texas, United States and operates 6,457 retail stores throughout the United States, Canada, Australia, New Zealand, and Europe. The company's retail stores primarily operate under the GameStop, EB Games, and Micromania brands. In addition to retail stores, GameStop also owns Kongregate, a site for browser-based video games; and Game Informer, a video game magazine; Simply Mac, an Apple products reseller; and Spring Mobile, an AT&T wireless reseller. It also operates Aio Wireless, an AT&T brand pre-paid wireless retailer. J. Paul Raines is GameStop's chief executive officer (CEO).
- 1 Operations
- 2 History
- 3 Other brands and concepts
- 4 Criticism
- 5 See also
- 6 References
- 7 External links
GameStop is divided into two operating segments: Video Game Brands and Technology Brands. The Technology Brands was created during the fourth quarter of 2013, and houses the company's Simply Mac, Spring Mobile, and Aio Wireless business. As of April 2014, the Technology Brands segment included 218 retail outlets. GameStop's Video Game Brands includes the company's other businesses such as video game and consumer electronics retail shops, Kongregate, a digital video game distribution site, and buymytronics.com, a consumer electronics marketplace. Pre-owned and value video games accounted for 47% of GameStop's gross revenue for the fiscal year ending February 2014.
Babbage's (1984 - 1994)
GameStop traces its roots to Babbage's, a Dallas, Texas-based software retailer founded in 1984 by former Harvard Business School classmates James McCurry and Gary M. Kusin. The company was named after Charles Babbage and opened its first store in Dallas' NorthPark Center with the help of Ross Perot, an early investor in the company. The company quickly began to focus on video game sales for the then-dominant Atari 2600. Babbage's began selling Nintendo games in 1987. The company went public in 1988. By 1991, video games accounted for two-thirds of Babbage's sales.
NeoStar Retail Group (1994 - 1996)
Babbage's merged with Software Etc., a Edina, Minnesota-based retailer that specialized in personal computing software, to create NeoStar Retail Group in 1994. The merger was structured as a stock swap, where shareholders of Babbage's and Software Etc. received shares of NeoStar, a newly formed holding company. Babbage's and Software Etc. continued to operate as independent subsidiaries of NeoStar and retained their respective senior management teams. Babbage's founder and chairman James McCurry became chairman of NeoStar, while Babbage's president Gary Kusin and Software Etc. president Daniel DeMatteo retained their respective titles. Software Etc. chairman Leonard Riggio became chairman of NeoStar's executive committee.
Gary Kusin resigned as president of Babbage's in February 1995 to start a cosmetics company. Daniel DeMatto, formerly president of Software Etc., assumed Kusin's duties and was promoted to president and chief operating officer of NeoStar. NeoStar chairman James McCurry was also appointed to the newly created position of NeoStar CEO. The company relocated from its headquarters in Dallas to Grapevine, Texas later that year.
NeoStar merged its Babbage's and Software Etc. units into a single organization in May 1996 amid declining sales. Company president Daniel DeMatteo also resigned, and NeoStar chairman and CEO James McCurry assumed the title of president. In September of that year, after NeoStar was unable to secure the credit necessary to purchase inventory necessary for the holiday season, the company filed for Chapter 11 bankruptcy. With the filing, NeoStar board member Thomas Plaskett became chairman and James McCurry remained company chief executive and president.
The leadership changes were not enough and in November 1996 the assets of NeoStar were purchased for $58.5 million by Leonard Riggio, a founder of Software Etc. and chairman and principal stockholder of Barnes & Noble. Electronics Boutique had also bid to purchase NeoStar, but the judge presiding over NeoStar's bankruptcy accepted Riggio's bid because it kept open 108 stores more than Electronics Boutique's bid would have. Approximately 200 retail stores were not included in the transaction and were subsequently closed.
Babbage’s Etc. (1996 - 1999)
Following his purchase of NeoStar's assets, Leonard Riggio dissolved the holding company and created a new holding company named Babbage's Etc. He appointed Richard "Dick" Fontaine, previously Software Etc.'s chief executive during its expansion in the late 1980s and early 1990s, as Babbage Etc.'s chief executive. Daniel DeMatteo, previously the president of both Software Etc. and NeoStar, became company president and COO. Three years later, in 1999, Babbage's Etc. launched its GameStop brand with 30 stores located in strip malls. The company also launched gamestop.com, a website that allowed consumers to purchase video games online. Gamestop.com was promoted in Babbage's and Software Etc. stores.
Barnes & Noble (1999 - 2004)
Barnes & Noble purchased Babbage's Etc. in October 1999 for $215 million. Because Babbage's Etc. was principally owned by Leonard Riggio, who was also Barnes & Noble's chairman and principal shareholder, a special committee of independent directors of Barnes & Noble evaluated and signed-off on the deal. A few months later, in May 2000, Barnes & Noble acquired Funco, an Eden Prairie, Minnesota-based video game retailer, for $160 million. Babbage's Etc., which had been previously operating as a direct subsidiary of Barnes & Noble, became a wholly owned subsidiary of Funco. With its acquisition of Funco, Barnes & Noble also acquired Game Informer, a video game magazine that was first published in 1991. Funco was renamed GameStop, Inc. in December 2000 in anticipation of holding an initial public offering for the company.
Barnes & Noble took GameStop public with a February 2002 initial public offering on the New York Stock Exchange. GameStop was listed under the ticker symbol GME. Barnes & Noble retained control over the newly public company with 67% of outstanding shares and 95% of voting shares. Barnes & Noble retained control over GameStop until November 2004, when it distributed its 59% stake in GameStop to stakeholders of Barnes & Noble.
GameStop (2004 - present)
GameStop acquired EB Games (formerly Electronics Boutique) in 2005 for $1.44 billion. The acquisition expanded GameStop's operations into Europe, Canada, Australia, and New Zealand. Two years later, in 2007, GameStop acquired Rhino Video Games from Blockbuster for an undisclosed amount. Rhino Video Games operated 70 video game stores throughout the Southeastern United States.
GameStop purchased Free Record Shop's Norwegian stores in April 2008. The company acquired 49 stores and converted them into video game shops. Daniel DeMatteo replaced Richard Fontaine as GameStop CEO in August 2008. DeMatteo had served as company COO since 1996. Fontaine, who had been GameStop chairman and CEO since 1996, remained the company's chairman. J. Paul Raines, formerly executive vice president of Home Depot, became company COO in September. GameStop acquired Micromania, a French video game retailer, in October 2008 for $700 million. GameStop, which had previously owned no stores in France, now had 332 French video game stores. It also acquired a majority stake in Jolt Online Gaming, an Irish browser-based game studio, in November 2009. Jolt closed in 2012.
J. Paul Raines became GameStop CEO in June 2010. He replaced Daniel DeMatteo who was named executive chairman of the company. GameStop acquired Kongregate, a San Francisco, California-based website for browser-based games. Terms of the deal were not disclosed.
GameStop acquired Spawn Labs and Impulse (software) in separate transactions during 2011. Spawn Labs was a developer of technology that allowed users to play video games that were run remotely on machines in data centers rather than their personal computer or console. Impulse was a digital distribution and multiplayer gaming platform. GameStop closed Spawn Labs in 2014.
GameStop purchased BuyMyTronics, a Denver, Colorado-based online market place for consumer electronics, in 2012. Later that year, it acquired a minority interest in Simply Mac, a Utah-based authorized Apple reseller. GameStop acquired the remaining 50.1% interest in Simply Mac in November 2013. GameStop also acquired Spring Mobile, a Salt Lake City, Utah-based retailer of AT&T-branded wireless services, in November 2013.
Other brands and concepts
Game Informer is a magazine owned by GameStop, Inc. and primarily sold through subscriptions which can be purchased at GameStop locations. Purchasing a subscription to the magazine also gets the subscriber the PowerUp Rewards card, GameStop's customer appreciation card. This increases all store-credit trade values by 10%, discounts all used accessories and games by 10%, gives new PowerUp members a coupon for 'Buy 2 Get 1 Free' on pre-owned games / accessories, enters them twice for the Epic Rewards Giveaway for each purchase, gives the cardholder opportunities to gain points with their purchases and redeem them for rewards and gains them access to special content on the Game Informer website.
GameStop PC Downloads
GameStop PC Downloads, formerly called Impulse, is a digital distribution service run and operated by GameStop. Originally known as Impulse when owned by Stardock, it was sold to GameStop in 2011 and rebranded as GameStop PC Downloads, with the Impulse client renamed as the GameStop App. Under the ownership of GameStop the service has had a redesign, and sells games that use other platforms such as Steam while also selling games that use its own proprietary DRM solution Impulse:Reactor.
GameStop sells used games that are traded in by customers for store credit or currency (20% less than credit ). This practice has recently come under fire from game publishers and developers as they make no money from the transaction.
GameStop TV is the in-store television network run by GameStop in partnership with CBS Outdoor. GameStop TV features programming designed to speak to the consumers shopping in GameStop stores. Each month brings content segments about upcoming video game releases, interviews, tips and tricks as well as lifestyle content provided by CBS.
Game Publishers have begun to obtain more pre-orders by including exclusive in-game bonuses, available only if the player pre-ordered the game. Bonuses typically include extras such as exclusive characters, weapons and maps. For example, GameStop included an additional avatar costume for Call of Duty: Black Ops when it was released in November 2010, and a pictorial Art-Folio for Metroid: Other M. Soundtracks, artbooks, plushies, figurines, posters, and t-shirts have also been special bonuses.
A new store concept, GameStop Kids is a separate store aimed at a younger audience. The store only sells E rated titles through T-rated titles, accessories and toys. The first store opened in October 2012 at Grapevine Mills, Dallas Texas; one of the stores is also in the Great Mall of the Bay Area in Milpitas, California.
Opened copies of game titles
The company has a policy where some copies of new games upon release are "gutted." This means that while sealed copies of the new release are kept behind the counter, one copy is opened and put on display to be advertised, with the game filed behind the counter. Consumers may reach for the opened copy and purchase at the counter, whereupon the consumer will receive a factory-sealed copy from behind the counter. If the opened copy is the last copy of the new game, it is sold at regular price.
GameStop's check out policy allows employees "to check out one item of store merchandise for personal use for up to four days", with the intent being to allow the employee to evaluate the game and learn about its content. This check out policy applies to used games only.
GameStop came under fire from critics when customers discovered that content had been removed from the original packaging of Deus Ex: Human Revolution. Gamestop had instructed employees to remove coupons for a free copy of Deus Ex: Human Revolution on OnLive, a cloud gaming service. Gamestop stated that the coupon promoted a competitor of its subsidiaries, Spawn Labs and Impulse, which it had acquired in April 2011. Later, GameStop entirely removed the PC version of Deus Ex: Human Revolution from its stores. Square Enix, the developer of Deus Ex, said that it "respects the right of GameStop to have final say over the contents of products it sells and to adjust them where they see fit in accordance with their policies."
Used games market
GameStop has frequently been criticized by game developers and publishers for the retailing of used game titles. By reselling used copies at a small discount on the same shelf space as new copies of the game, it is argued that GameStop is taking profits directly from organizations such as developers and publishers which are solely dependent on their intellectual property for revenue. In effect, this means that companies such as GameStop can resell used copies of a game within days of the title's release and keep all of the profit, thereby cutting directly into the critical initial sales which would otherwise go to publishers and developers. It has been suggested by industry insiders that this directly results in increases to the retail cost of new games.
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