A subset of the decline of brick-and-mortar retail, GameStop too has announced that it will be closing 180 to 200 of its physical stores by the end of the year that are "underperforming."
There have already been 195 closures of GameStop shops since last year, following a deteriorating balance sheet including the company's second quarter sales falling by almost 15%. This has resulted in the company making a net loss of around $32 million.
The irony is that two months ago, the company had outlined a revival plan detailing how it was going to resuscitate its stores, and has now made a complete U-turn.
In a recent earnings call, GameStop CFO James Bell said: "While these closures were more opportunistic, we are applying a more definitive, analytic approach, including profit levels and sales transferability, that we expect will yield a much larger tranche of closures over the coming 12 to 24 months."
Some say this is the case of an industry decline, with new developments in software technology and the expansion of online networks making it easier to download games online, both legitimately and illegitimately. Games are also available through apps now, or even on the world wide web. Many physical games that were once bought can be upgraded through online expansion packs.
"While not up to our expectations, these results are generally in-line with declines across the video game industry and indicative of sales volumes at this point in the console cycle," said the CFO.
In fact, more than 8200 retail stores will be closed this year, a clear testament to the increasing latency of the retail industry in terms of brick-and-mortar stores.
In August, GameStop laid off 120 employees, a figure that will most definitely exponentially increase as the closures continue.
"We believe these actions will significantly add to our profit improvement run rate with little to no cash expense as our average lease life is approximately two years," Bell added.