Summary
New GameStop CEO Ryan Cohen recently sent out an email to the company’s corporate employees, detailing his expectations and plans for the future of the business. The major gaming retailer has certainly had its ups and downs over the past few years. It saw a major jump in its stock price and popularity during the events of the 2021 short squeeze, driven largely by speculators on the Reddit channel, WallStreetBets. This boost was short-lived, however, with its stock and sales dropping noticeably since then. WhileGameStop’s stock price spiked earlier this year, the news has mostly been negative and Cohen has been looking to turn this around.
Cohen has been a part of the company’s corporate structure for some time and has been seen as a major influence behind the scenes. He only recently became the CEO, however, afterGameStop fired CEO Matthew Furlongthis past June. Now, it seems the new head of the corporation is looking to shake things up.
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In an email apparently sent to allGameStopcorporate employees, Cohen calls for “extreme frugality” and more careful examination of all discretionary spending. The message strikes a stern tone, with Cohen speaking in terms of “survival” of the business and insisting that waste will not be tolerated going forward.
Worryingly, the email does not project much positivity or optimism for the future. While Cohen emphasizes that he intends to turn the business around, he also seems aware that this may not happen. He mentions his willingness to go “down with the ship” and concludes with the statement that saving GameStop “won’t be easy.” This messaging would seem to suggest concern on the part of the CEO and this concern is understandable.
GameStop has explained why sales are downby referencing larger problems in the industry and developer and publisher behavior. However, it’s difficult to ignore the fact that the retailer is also losing money due to the shift to digital distribution of games. As more consumers choose to download titles directly to their PCs and consoles, it will be more difficult for those that sell physical copies to increase revenue. Saving money and cutting spending are, indeed, good strategies for a business, but GameStop won’t be able to save its way out of decreasing sales forever.
Cohen seems aware of this challenge as theGameStop CEO recently called for a big requirement for consoles, arguing that they should continue to consistently continue to have disc drives. Pushing for this requirement in the industry clearly indicates that Cohen knows game disc sales are a major part of GameStop’s business. The company head may have a plan and be seeking to get his employees on the same page, but he also seems to know that GameStop’s future remains precarious for now.
