[ad_1]
"We are at the end of the console cycle," Sherman told CNN Business on Wednesday. "The game as an industry could not be stronger … it's us who need to rotate. It's GameStop that has to make some changes."
As part of its cost reduction plan, GameStop has announced the closure of 180 to 200 underperforming stores by the end of the fiscal year, which ends in February 2020.
"It's part of the physical retail business," Sherman said. "As a good retailer, you do not try to keep all the stores."
The company also made two rounds of layoffs in August, one of them having removed 120 posts and dismissed at least six journalists from its game publication "Game Informer". Sherman said that it was about planned changes.
"If you look at the sales trend in recent years, the general administrative costs of sales have not changed with sales, so we had a cost structure to take into account," he said. . "We have found [it] unpleasant but we had to do it. "
The company stated that it had no other plans for dismissal.
The company's challenge is to maintain a constant flow of traffic in its stores.
"The gaming sector is a bit of a hit, we get traffic in our stores when there's a new release," Sherman said. "We are trying new store formats, such as competitive games in stores … it's not seasonal, it's not motivated by new stuff."
GameStop will turn its stores into a "social and cultural gambling hub," he said. It could mean bringing players into the shops to compete together in the sport.
Analysts seem optimistic that GameStop can weather this storm.
"The fate of GameStop has long been linked to the alleged disappearance of console gaming," said Joost van Dreunen, co-founder of SuperData, a Nielsen group company that analyzes the video game industry. "I have no doubt that Microsoft, Sony and Nintendo continue to view GameStop as an integral part of their marketing and sales strategy over the next few years."
Joe Feldman, general manager of research and analyst at Telsey Advisory Group, says that as video games improve and 8K games are introduced, the size of digital files will be such that physical copies will be preferable.
Games for the next generation of consoles "will be amazing, but also very large in terms of memory, which will result in very long downloads and insufficient storage capacity," he said.
GameStop relies primarily on the sale of physical copies of video games, which accounted for 22.2% of its sales in the last quarter. The company could benefit if physical copies become more convenient to use than digital copies.
For the moment, Sherman said that GameStop will monitor cloud games, which still represent only a small fraction of the industry.
"We do not have a shadow of doubt, the next three or four quarters, from the point of view of sales, will be difficult [sic], as it's the end of the console cycle, "said Sherman. But we are optimistic about a rebound. "
[ad_2]
Source link