Will GameStop Go the Way of Blockbuster?

Fortunately, GameStop is not on track to follow in the footsteps of its former competitors, Blockbuster and Borders. In fact, the future of the company may lie in digital distribution. With its presence in downloadable content, PC and console games, GameStop may soon become the equivalent of Amazon for digital products. While hard-core gamers continue to buy games, casual gamers are not so willing to part with their hard-earned cash. There are too many free options out there, and the upcoming arrival of streaming services may make this difficult for GameStop to survive.

While the future of video game retailing looks bleak, GameStop has long been a staple in gaming. With 4,860 locations in the U.S., Canada, Australia, and Europe, it is the largest video game retailer in the world. The company first came about as Babbage’s in 1984, and was acquired by Barnes & Noble in 1999. Barnes & Noble eventually sold their controlling stake in the company, and GameStop has continued to acquire smaller companies to expand its physical footprint.

As video game sales continue to dwindle, GameStop’s future lies in digital distribution. With the rise of streaming services like Netflix and Google’s acquisition of Blockbuster, digital distribution may well be GameStop’s second life. Depending on how well GameStop can implement its turn-around plan, it could become a digital distribution platform, similar to Netflix. The company isn’t out of the woods yet, but it may need to make some radical changes to remain relevant.

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