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The GameStop Business Model focuses on selling games and entertainment products in multiple eCommerce stores across the United States of America and other countries such as Australia and Canada. The company’s history started in 1984 in Dallas, Texas, USA. Today, it has grown to become a global brand.  Arcade Machine Spares

The company’s goal reflects its marketing strategy: sell video games and accessories. These accessories include collectibles, video consoles, electronic products, etc. Asides from selling in e-commerce stores, GameStop has a brick-and-mortar location customers can easily walk into to pick up products of their choice. 

Regarded as the largest merchandise retailer of video games across the world, GameStop evolved from a company founded in 1984 in Dallas, Texas, with Leonard Riggio, Daniel DeMatteo, and Richard Fontaine as the current owners. The company started as Babbage’s, a software merchandise retailer founded in 1984 by James McCurry and Gary M. Kusin. Babbage’s, named after Charles Babbage, started selling video games and went public in 1988 through an initial public offering. 

However, in 1994, Software Etc. merged with Babbage’s to become NeoStar Retail Group. James McCurry became NeoStar’s chairman, while Gary Kusin resigned in 1995 to establish a cosmetics company. However, sales began to decline, and NeoStar couldn’t meet its financial responsibilities. In 1996, Leonard Riggio, a major stockholder at Barnes & Noble, purchased NeoStar for $58.5 million.

Riggio renamed the company Babbage’s Etc. and made Richard Fontaine chief executive, while Daniel DeMatteo, the former president of NeoStar and Software Etc. became the president of Babbage’s Etc. In 1999, Babbage’s Etc launched gamestop.com, a website for selling video games.  In the same year, the company was acquired by Barnes & Noble for $215 million. In 2000, Barnes & Noble bought Funco, a video game retailer, for $160 million. Finally, Funco was renamed GameStop in December 2000 and went public again in February 2002. Today, the company has over 5000 stores in different countries.

Presently, 25.74% of the company belongs to institutional shareholders, 10.63% belongs to insiders, and 63.63 % belongs to retail investors. However, Ryan Cohen is the largest individual shareholder of GameStop, with about  13% of the company. As such, Ryan Cohen is the Chairman of GameStop.

GameStop’s mission statement is simple, “To deliver customer satisfaction.”

GameStop works by providing video games, video-game accessories, headsets, keyboards, consumer electronics, and subscriptions to its gaming magazine for a fee. The company receives video games and other accessories from its customers in exchange for credits or cash, and then sells these pre-owned items as part of its stocks. Additionally, GameStop has a TV that keeps its audience updated on upcoming video game releases, product demos, etc.

Usually, GameStop makes money by selling video games, accessories, and consumer electronics. It also buys these items from its audience in return for cash or trade credits. GameStop makes money through its collectibles, hardware and accessories, and software.

Collectibles are items related to video games bought by video game lovers to express their love for a particular video game. Collectible sales make up 11.4% of GameStop’s revenue, making $228.20 million in the fourth quarter of 2020. However, since 2019 when the company sold $245 million worth of collectibles, collectible sales have witnessed a decline of 7% yearly growth. Still, GameStop operates 48 collectible stores worldwide, with 25 in the United States. Asides from collectibles, GameStop has a print and digital video game magazine, Game Informer, which is subscribed to worldwide. 

The next revenue stream of GameStop is selling preowned and new video games console and accessories such as headsets, memory cards, PlayStations, controllers, power adapters, visual cables, etc., from brands such as HYPERX, Atrix, ASUS, Sony, MSI, Razer, etc. In the fourth quarter of 2020, GameStop generated $1.16 billion from hardware and accessories, making about 55% of its total revenue. 

Besides selling pre-owned hardware and accessories, GameStop sells pre-owned and new digital and video game software used on different generation consoles. The audience can download this digital software to their computers or play directly on the internet. However, the revenue generated from software declined from $1 billion in the fourth quarter of 2019 to $731.20 million in the fourth quarter of 2020. The company experienced such revenue losses because most of its stores were closed during the pandemic, affecting its sales

GameStop has a license to sell Apple and Sprint’s full range of products. Sprint is a cellular services company that provides unlimited calling, entertainment, and device protection services, while Apple sells smartphones, personal computers, tablets, wearable devices, software applications, accessories, digital content, etc. GameStop partnered with Apple and Sprint as merchandise retailers to sell their products on its channels, and it gets a commission for every sale it makes.

The GameStop Business Model can be explained in the following business model canvas:

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GameStop’s customer segments comprise:

GameStop’s value propositions are:

GameStop’s  customer relationships comprise:

GameStop’s revenue streams are:

GameStop’s key resources include:

GameStop’s key activities comprise:

GameStop’s key partners are:

GameStop’s cost structure includes:

Below, there are GameStop’s competitors:

Below, there is a detailed swot analysis of GameStop:

Below, there are GameStop’s strengths:

Here, there are GameStop’s weaknesses

Below, there are GameStop’s opportunities

Here, there are GameStop’s threats

Despite the heavy blow the pandemic dealt GameStop, the company’s resilience hasn’t reduced, as it is still regarded as the largest merchandise retailer of video games in the world. However, the company needs to expand its product range, adjust its pricing system in light of the economic problems in the world and innovate to ensure it stays on top of its game. 

Business Model Examples and Types Using the Business Model Canvas for Detailed Analyssis

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