It’s no small secret that physical media is on the decline. As the internet gets faster and more readily available, the video game market moves more towards a digital future. This shift has had a pretty hefty effect on GameStop in particular, which has had trouble hitting its quarterly projections for quite some time. Now, it appears that a buyout of the retail chain may be a mere few weeks away, as rumors have begun to circulate that a deal could come as early as mid-February.

Rumors of a potential buyout have been circulating for months, but a recent report has revealed that two firms, Apollo Global Management and Sycamore Partners, are currently bidding to acquire the company. GameStop currently needs to reduce $817 million in debt according to industry analyst Michael Pachter, who also recommended that the company close stores and go private.

gamestop lineup

GameStop’s troubles are nothing new. The company has lost 67.5% of their market value since 2015 and has continued to steadily decline in value, with a net operating loss of $488.6 million in the third quarter of 2018 alone. The company has attempted to branch out in the past few years by putting a heavier emphasis on collectibles in their retail locations and investing in esports, but it appears that it hasn’t done much to stop the bleeding.

The Steady decline of GameStop can be attributed to a variety of different factors, the digital market shift only being one of them. The company has had several leadership shifts since the death of Paul Raines, the company’s former CEO, in March of 2018. Michael Mauler was appointed CEO shortly after Raines’ death, but stepped down after three months for personal reasons. Shane Kim is currently operating as interim CEO according to GameStop’s website, though these rapid changes in leadership surely haven’t helped ease investor’s fears.

It seems it’s only a matter of time before GameStop is forced to accept an offer or close some of its locations. No matter what it tries, like the quickly shuttered game rental program, the company doesn’t seem to be able to shake its financial woes in the wake of a constantly-shifting market. Hopefully, the company will be able to figure out a way to survive before it is forced to take such drastic measures.

Source: gamesindustry.biz

tags: GameStop