After GameStop's Power Pass program has been suspended, Krystallina wonders what the future holds for the company.
Remember a few weeks ago the Internet was abuzz about Power Pass, GameStop’s rental game program? I also covered the news and was interested in how this “pay $60, rent as many games as you want one at a time, keep one” plan was going to be handled.
Five days before the full, official launch (which, I may remind you, was advertised in their own magazine), the program was suspended indefinitely.
Employees told Kotaku they guessed Power Pass was halted due to the company’s old computer systems. That may be true, but if so, the company needs to do better tests or analyses before promoting any future programs, and don’t put a firm date out until it’s completely ready.
What’s In the Near Future for GameStop?
But as their game section faces fierce competition from Amazon, Best Buy, and digital downloads, one of the few bright spots in GameStop’s sales has been collectibles. Two and a half years ago, the chain purchased ThinkGeek, and a few months later the first ThinkGeek physical store opened. Now there are about thirty such stores.
But GameStop isn’t happy with just leaving GameStops as video game stores and opening ThinkGeek stores as their sister company. In 200 of their stores, video games and collectibles are now split 50-50. While this is a small number of stores compare to their 7,000 stores across the globe, the half-collectibles, half-games locations already make up 25% of their total stores. And don’t worry about video games sales: ICv2 reported that internationally, video game sales actually were stronger at these stores versus traditional GameStops.
Now, on first instinct, that seems odd. Fewer games = more people buying games? Well, this is likely for two reasons. First, as the GameStop CEO said, people who may not normally come to GameStop may be lured by the promise of a rare Funko POP! figure or a sale on board games. Then they spot a game, find it interesting or remember so-and-so’s birthday coming up, and they just add it to their bill. Impulse buying at its finest.
But there’s another psychological issue that comes into play: choice overload, also known as overchoice. I’ve discussed this before, but sometimes when people face so many options, we end up choosing none of them. Sure, some people will be upset that the game they were searching for isn’t available. However, if the shelves have more space, then it is also easier to set up a visually attractive display to lure customers. It’s much easier to find books and games with the cover facing forward rather than by the spine.
So, should GameStop start becoming a mini-ThinkGeek? After all, it seems like a win-win: video game sales go up, and the chain reaches a customer base they might not normally reach. There’s even locations like this one in New York City where GameStop and ThinkGeek occupy the same space.
Can ThinkGeek Carry GameStop?
Unfortunately, some experts doubt that GameStop’s current boom can last long-term. Their net income is higher than the same quarter, but their results are still below what analysts had predicted. In addition, while the Nintendo Switch console is boosting sales now, eventually the demand is going to cool off.
On the other hand, people aren’t going to be stocking up on Switches, but they’ll probably keep buying figures and tumblers of their favorite characters. Of course, if you can’t go to your local GameStop to pick up a new game, what’s the point of going to your local store? They don’t have a ship-to-store option online like many other chains.
Sure, they have an online presence, but online shoppers also can easily access hundreds, even thousands of competitors. They also already have ThinkGeek stores, and while the number of locations is very small compared to its parent company, do they want the two to infringe on each other?
On the other hand, other stores with similar brands do well even when in close proximity, and my two closest GameStops are only 1.5 miles from each other in the same town. (A third in between located in the local mall was too much though.) Prices and promotions also differ between the two. The Sailor Moon Rainbow Moon Chalice costs $106.99 at ThinkGeek but was available for several days online (and still available in-store) for a less than third of that ($30) at GameStop.
With TransWorld stores, Best Buy, Barnes & Noble, and now Toys R Us all trying to push collectibles, the geek boom could also stagnate for GameStop. Finding a balance is usually the solution, but how much of a balance should there be between GameStop’s original focus and their latest idea?
Personally, as someone who has Prime and Best Buy’s Gamers Club Unlocked, I find little need to go to GameStop for games. I also dislike their policy of opening games and calling them “new”, even if it’s for security reasons. (Use a dummy box on the shelf or individual cases if you don’t want a cabinet, sheesh.) I’ve also spent more in the last week or so at GameStop than I think I’ve spent in my entire life thanks to some incredible deals on trend merchandise. So yes, I’d rather have a GeekStop than a GameStop.