Gamestop

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GameStop Corporation (nyse: GME) is an American video game and entertainment software retailer. The company, whose headquarters are in Grapevine, Texas (a suburb of Fort Worth), United States, operates 6,200 retail stores throughout the United States, Canada, Australia, Ireland, Denmark, Finland, Germany, Italy, New Zealand, Norway, Spain, Austria, Puerto Rico, Switzerland, Portugal, and in Sweden. GameStop opened around 400 new stores for the 2009 business year. The company operates retail stores under the name GameStop, EB Games, Babbages, Micromania, MovieStop, and Funcoland. In addition, the company runs two e-commerce websites, GameStop.com and EBgames.com, and also Game Informer magazine, GameStop's proprietary video and computer game publication. In addition to video and computer games, GameStop sells magazines, strategy guides, and other related merchandise. A major source of the company's profit is also buying used games from its customers and selling them back at a fraction of retail value.

History


GameStop traces its roots to Babbage's, a small software retailer that started in Dallas, Texas in 1984. The movements that made Babbage's into GameStop started in 1994 with a series of mergers between Babbage's and several other software retailers. The first was with Software Etc. in 1994, the second was with Funcoland stores in 2000, and the third was with the Gamesworld franchise in Ireland and in the United Kingdom and in 2008, the merger of Electronics Boutique in 2005, and the merger of French-based Micromania, taking six competing, major software retailers and placing them under a single corporate umbrella.

When Babbages merged with another stalling software retailer, Software Etc., in 1994 the combined company was named NeoStar Retail, but the two halves continued to operate as if they were separate entities. The combined management of the newly formed entity developed a classic case of the right hand not knowing what the left was doing. This ultimately caused NeoStar to go into Chapter 11 reorganization in early fall of 1996. At this point the company had approximately 800 stores in the United States. Several potential buyers of NeoStar's assets emerged. On the last day of the manager's conference there was a special guest during the meeting. Leonard Riggio, the head of Barnes & Noble, announced that he and a group of investors were going to put in place the financing to keep the company afloat, and get new merchandise into the stores in time for Christmas (at this point, the company's creditors were owed so much back revenue that they were no longer shipping anything to NeoStar). In a personal comment during the address, Riggio stated that he "hated" the name NeoStar Retail, and thought that the merged Babbage's/Software Etc. should have been called Babbage's Etc. He said should his buyout bid be successful that the company would be renamed. From the potential buyers, the judge desired to accept the offer from the one that would keep the most people working, preserve the most competition and consumer choice, and be the most stable. Ultimately, Riggio's offer was accepted on the day before Thanksgiving. Barnes & Noble, through B. Dalton, was the original owner of Software Etc. A new management team largely composed of former Software Etc. executives and long time associates of Len Riggio was put in place to run Babbage's. On November 12, 2004, GameStop spun off from Barnes & Noble. Due to Riggio's involvement, GameStop and Barnes & Noble employees still receive employee discounts at each other's stores, despite the companies being completely separate. At this point the company had approximately 800 stores in the United States. In October 2009 Leonard Riggio, chairman of the board at Barnes & Noble and director at GameStop sold 2.3 million shares of GameStop for $60.2 million. According to a report from Barron's, via Gamasutra, that sale could be a sign of impending bad financial news for GameStop. The original report draws comparisons to a previous stock sell off by Riggio, prior to a hefty drop in the company's value. Riggio still retains 9.1 million shares in the game retailer.

1996 closures
The day after Thanksgiving 1996 approximately 100 Babbage's and Software Etc. stores closed their doors. The remaining merchandise from these stores was shipped to 100 of the remaining stores that would participate in a massive "going out of business" sale throughout December. These 100 stores would close for the last time on Christmas Eve, and all merchandise left would be shipped back to corporate headquarters by New Year's Eve. The company would be pared back to about 600 of its best performing stores.

Merger with EB Games
On April 18, 2005, GameStop and EB Games announced that they had entered into a "definitive agreement and plan of merger". After shareholders and US regulatory agencies approved the merger, it closed on October 10 of that year with the agreement that the companies would be run separately, but not as they had been in the past. To ease the transition process of the two companies being run as one, it was agreed upon that the two separate entities would not merge operating activities until the new fiscal year which starts February 1; this also included maintaining two separate distribution centers. At the beginning of the following year, operating activities of the two companies was integrated, starting with the realignment of districts and the closure of EB's West Chester, PA corporate office.

Acquisition of Rhino Video Games
On January 4, 2007, GameStop Corp. officially purchased Rhino Video Games from Blockbuster and the stores were renamed GameStop during a remodel period lasting through late Spring 2007.

Competition
After acquiring EB Games, GameStop helped to solidify its position with "hardcore gamers". Remaining competition comes from Amazon.com, Best Buy, eBay's Half.com, Toys "R" Us and other retailers of video games such as the lesser known game franchise, Play N Trade. In 2009, Amazon.com began a trade-in program for used games, where customers can trade in games for credits for other games. This is in direct competition with GameStop's existing trade-in program.

Norway
On April 6, 2008, GameStop Corp. officially purchased 51 stores from the Dutch entertainment company Free Record Shop. Throughout the summer of 2008, most of the stores were rebranded to GameStop.

France
In October 2008, GameStop announced it would purchase France’s leading video-game retailer, Micromania, from the L Capital equity fund for $708 million, including debt. The purchase of Micromania will add 332 locations (boosting locations in Europe to 1,077 total) and expand GameStop into France for the first time. Micromania President Directeur General Pierre Cuilleret will keep his current post. GameStop financed the purchase with cash on hand, credit, and $150 million loan from Bank of America. This acquisition took place in November 2008.

UK
As of the end of the 2009-2010 fiscal year, rumours have started that GameStop will attempt a buyout of GAME group, due to GAME's profit losses over that year.

Game Informer
Game Informer is a magazine owned by GameStop, Inc. and primarily sold through subscriptions sold at GameStop locations. It is the most-subscribed video game magazine, and one of the top fifteen highest-circulation magazines overall, in the United States. Purchasing a subscription to the magazine also nets the subscriber the Edge card, GameStop's customer appreciation card, which increases all store-credit trade values by 10%, and discounts all used accessories and games by 10%, and gains them access to special content on the Game Informer Website.

Trade-ins
GameStop sells used games that are traded in by customers for store credit or currency.

MovieStop
MovieStop stores focus on selling movies rather than games, with a structure similar to that of a GameStop. They buy, sell, and trade movies. MovieStop offers an array of movies, both used and new, in DVD, Blu-ray Disc, and Universal Media Disc formats. As of July 2009, there are 46 MovieStop stores across the United States, including those in Delaware, Pennsylvania, Alabama, Virginia, Georgia, Massachusetts, New Jersey, Maryland, North Carolina, and Florida. As of September, 2009, MovieStop no longer accepts disks traded without the original case. MovieStop contracted E-Play to produce kiosks that buy, sell, and rent movies. These are normally found in GameStops in the midwest and southeast of the United States. They exchange your DVDs or Blu-Rays for GameStop store credit. The kiosk pricing follows GameStop rules, however the kiosk itself does not sell disks in cases. If you wish to have the case you must ask a GameStop employee to fetch it. You may also rent movies from the kiosk. MovieStop machines found outside of GameStop stores will only accept disks in return for the credit at the store in which they are found.

GameStop TV
GameStop TV is the in-store television network run by GameStop in partnership with CBS Outernet. CBS has upgraded 3300 stores (as of November 2009) to a digital network. Each digital store has a High Definition Monitor (40") run by a PC with a speaker system designed to provide audio throughout the store. The PC checks in a regular intervals during the day back to a server looking for new content. GameStop TV features programming designed to speak to the consumers shopping in GameStop stores. Each week brings content segments about upcoming video game releases, interviews, tips and tricks as well as lifestyle content provided by CBS. CBS Outernet also manages advertising sales for the network as a division of CBS Outdoor.

Pre-order bonuses
GameStop has recently attempted to raise its amount of pre-orders by including exclusive in-game bonuses, available only if the player pre-ordered the game, bonuses range from exclusive characters, unique weapons and maps.

Criticism
The company has a policy where new games upon release are "gutted." This means that while sealed copies of the new release are kept behind the counter, one copy is opened and put on display to be advertised, with the game filed behind the counter. Consumers may reach for the opened copy and purchase at the counter whereupon the consumer will receive a factory-sealed copy from behind the counter. If the opened copy is the last copy of the new game, it is sold at regular price. This has drawn criticism as the opened copy is not considered new due to the removal of the factory seal. Gamestop's check out policy allows employees "to check out one item of store merchandise for personal use for up to four days." The Federal Trade Commission looked into the selling of gutted check out games as new to determine if any laws were broken.