GameStop Corporation is the world's largest video game and entertainment software retailer. The company, whose headquarters are in Grapevine, Texas (a suburb of Dallas), United States, operates 5,889 retail stores throughout the United States, Canada, Ireland, Australia, Denmark, Finland, France, Germany, Italy, New Zealand, Norway, Spain, Austria, Puerto Rico, Switzerland, Portugal, Sweden and a test store in the United Kingdom. GameStop is expected to open around 600 new stores for the 2008 business year.
Retail stores operate primarily under the GameStop and EB Games brands. 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, entertainment DVDs, and other related merchandise. A major source of the company's profit is also buying used games and movies from its customers and selling them back at an increase. A new store concept called MovieStop, which focuses on selling movies rather than games, is currently building and operating stores in the southeastern United States, including the Dallas area.
Babbage's and Software Etc.
GameStop traces its roots to Babbage's, a small software retailer that started in Dallas, Texas in 1983. The movements that made Babbage's into GameStop started in 1994 with a series of mergers. The first was with Software Etc. in 1994, the second was with Funcoland stores in 2000, and the third was with Electronics Boutique (now EB Games) in 2005, taking four competing, major mall software retailers and placing them under a single corporate umbrella.
When Babbage's merged with another mall 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.
On the last day of the manager's conference there was a special guest during lunch. 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, and he was boldly confident it would be, 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 and 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 Etc.
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.
Acquisition by Barnes & Noble
When Funco, Inc. (operator of FuncoLand stores) was acquired by Barnes & Noble
in 2000, there was a corporate restructuring, and Babbage's Etc. became a wholly owned subsidiary of Funco. The name at that time was changed to GameStop, Inc.
In 2002, GameStop bought out the Gamesworld franchise in Ireland and immediately took control of their 10 stores; the company now operates at over 50 locations in the country.
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.
Merger with EB Games
On April 18
, 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. Most of the upper management positions maintained GameStop executives; however, President at the time, Joe DePinto, resigned his position as President and returned to work as President and CEO of 7-Eleven
leaving a vacancy for EB President Steve Morgan. The transition of the two major super powers in the industry was challenging because of so many different conflicting views in different areas. Executives felt it was best to conduct market research and incorporate the best practices from each company into the new business structure. This idea of incorporating only the best was carried over to many other aspects of the merger decision including the decision on who would maintain the middle management positions. Many regional directors and district managers from both EB and GameStop lost their jobs.
Through the year, GameStop stores transitioned to the EB Games' Windows-based POS, or Point of Sale system, replacing GameStop's aging MS-DOS-based program. At the end of 2006, the only remaining differences between the stores were primarily the interior design and layout of each store, based on when they were built and what company owned them at the time. Both EB Games and GameStop stores have several distinct design aspects however, EB Games stores are in the process of receiving remodels to make them look like GameStop stores. Stores are also receiving the GameStop brand above the store front and inside the store.
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.
Acquisition of Micromania
In October of 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
The GameStop Edge Card and Game Informer Magazine
For nearly every point-of-sale transaction, GameStop employees push the sale of the Edge Card including a 12-month subscription to Game Informer Magazine, at a cost of $14.99. However, GameStop has recently experimented with a $19.99 price point instead in select stores. With the Edge Card, the value of games and accessories traded in for store credit is increased by 10%, and it decreases the cost of used games and accessories by 10%.
For reasons such as anti-theft, conservation of space, and display, some copies of new games are opened (with the exception of reserved pre-orders), with the contents removed from the case and placed in an organized drawer, while the empty game case itself is placed on the shelf. This process is commonly known as "gutting" among the GameStop employees. Upon request, employees will reseal or shrink wrap an opened copy of the game, though some collectors would not consider these games "new" due to the removal of the original seal and this discourages many gamers from purchasing "new" games at GameStop. The games are also guaranteed to work; pre-orders, as well as newly released titles usually are not affected.
Despite various criticisms of incidents and practices at Gamestop stores, Gamestop maintains these are isolated incidents.
is a store that focuses 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 2008, there are 45 MovieStop stores across the United States, including those in Pennsylvania
, New Jersey
, North Carolina
. 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.