It’s actually kind of depressing.
GameStop has decide to stop trying to sell the company. They announced the news on Tuesday. Though they’ve yet to say what this means for the company’s future.
Variety got Wedbush Securities analyst Michael Pachter to weigh in on the situation, though.
A new console without a disc drive — unlikely, but possible — could kill their business,” Pachter explained. “And all this talk of Amazon, Apple, and Google streaming (video games) causes some to question whether there will be consoles at all.”
Pachter added that he doesn’t believe those future game-streaming services are intended to replace game consoles, but rather to supplement them.
“But try to explain that to a lender,” he told Variety.
Looking ahead, Pachter told investors that Nintendo should sell 1 million Switch units in its current fiscal year ended March, and another 4 million units in its next full fiscal year. He cautioned, however, that Nintendo might have some difficulty look further ahead.
“Sales beyond the first year will be affected by third party software support; the underpowered Switch is unlikely to attract much,” he said.
Also Michael Pachter, circa January 2017, via Fortune
So, yeah, grain of salt on that one.
As for GameStop themselves, back in June 2018, they started a review to see what could be done to increase shareholder value. From the Tuesday announcement:
The Board undertook a comprehensive review process, including discussions with third parties regarding a potential sale of the company
That involved selling off their Spring Mobile business, which brought them $735 million in cash proceeds.
The Board continues to evaluate the optimal use of these proceeds, which could include reducing the company’s outstanding debt, funding share repurchases, reinvesting in core video game and collectibles businesses to drive growth, or a combination of these options. Furthermore, the Board is continuing its search process to appoint a highly qualified, permanent CEO and is working with a leading executive search firm.
I suppose the biggest revelation here is that they’ve been without a proper CEO for over half a year. That said, things aren’t exactly looking great for the chain, as of yet.
Source: Variety
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