GameStop is shifting its focus from video games towards the wireless market, according to the company’s Chief Executive, Paul Raines, during the GameStop’s Investor Day 2014 event. Some of the other markets that GameStop is also looking towards for future growth are the Apple’s ecosystem and non-gaming tech devices. He termed the company’s evolution towards other ventures as “GameStop 3.0.” Furthermore, keepings its new goals in mind, GameStop will shut down approximately 120 of its 6,457 locations worldwide, Raines announced.
Raines said the video games section of GameStop is expected to continue to grow on the backs of the Xbox One, PlayStation 4, and Wii U. He said the firm’s shift of focus towards wireless market and the decision to close at least 120 stores worldwide is in no way a sign that their gaming business is declining. In fact, Raines has predicted the overall console gaming market will expand to be worth $18 billion by the end of 2015, from which, GameStop is sure to benefit.
At the same time, GameStop will expand on their wireless ventures by inaugurating more than 200 Spring Mobile stores and 20-25 Simply Mac stores. The company will also add 100 to 150 Cricket Wireless stores to the 31 stores currently operating in the country. This will quintuple GameStop’s footprint in the pre-paid wireless market.
Giving the example of cookware retailer Williams-Sonoma, which successful acquired Pottery Barn and later expanded to furniture store West Elm, Raines said GameStop was also looking to expand to a wider target audience so that they too can thrive on higher profits. He also gave the example of VF Corporation, which now owns Lee, Timberland, Wrangler, Jansport, and a number of other clothing brands, but initially began by making underwear. “So we are students of extraordinary business transformation stories. Williams Sonoma and VF are great examples to us…,” the executive head said during a presentation.
Raines also said that wireless market was rapidly gaining consumer space and has the “most exciting” prospects for growth and expansion. He further said that “connected devices are forecast to go from $8 billion today to $50 billion in five years.” He said GameStop’s decision to focus on the wireless market is an excellent opportunity for the firm and it is only the beginning as in the future many more connected devices will be sold at their stores and available for trading too.
Meanwhile, GameStop already has investment in Apple’s ecosystem. The firm buys, sells and trades iOS devices at its stores, of which, Simply Mac plays an integral role. Referring to the firm’s decision to double their Simply Mac stores, Raines said the executives of his firm had met with the leadership at Apple and had their support to grow the venture. Referring to the expansion of AT&T specialist, Spring Mobile, Raines said: “GameStop is already the third-largest and fastest-growing AT&T retailer in the US.”
The executive further said despite their decision to close down 120 GameStop stores and move focus from video games to their wireless market, their buy/sell/trade model is to remain as an integral part of their businesses and it can also apply to the new markets.
By Faryal Najeeb