×

GameStop Just Gave Up on Trying to Sell Company

GameStop is no longer trying to sell the company due to a “lack of available financing on terms that would be commercially acceptable to a prospective acquirer,” it announced Tuesday.

The company didn’t lay out what that meant in terms of the future for the company.

What that means, according to Wedbush Securities analyst Michael Pachter, is that while GameStop may have been able to find investors, they weren’t able to find any lenders who thought that company was a good investment.

“A new console without a disc drive — unlikely, but possible — could kill their business,” Pachter explained. “And all this talk of Amazon, Apple, and Google streaming (video games) causes some to question whether there will be consoles at all.”

Pachter added that he doesn’t believe those future game-streaming services are intended to replace game consoles, but rather to supplement them.

“But try to explain that to a lender,” he told Variety.

In June 2018, GameStop’s Board and outside financial and legal advisors started a review of a “wide range of alternatives to enhance shareholder value,” the company said in Tuesday’s announcement.

“The Board undertook a comprehensive review process, including discussions with third parties regarding a potential sale of the company,” it wrote.

As part of that process, the company sold its Spring Mobile business. The sale, which was completed on Jan. 16 brought in about $735 million in immediate cash proceeds.

“The Board continues to evaluate the optimal use of these proceeds, which could include reducing the company’s outstanding debt, funding share repurchases, reinvesting in core video game and collectibles businesses to drive growth, or a combination of these options,” according to the statement. “Furthermore, the Board is continuing its search process to appoint a highly qualified, permanent CEO and is working with a leading executive search firm.”

Despite being the largest brick-and-mortar games retailer in the U.S., the company has struggled with its relevance in an era of digital game sales and popular online retailers like Amazon which offers more competitive pricing and direct shipment to consumers.

More Gaming

  • GTA Online

    America's Biggest Labor Federation Asks Game Developers to Unionize

    A leading figure from America’s biggest labor organization penned an open letter to game developers encouraging unionization across the games industry. AFL-CIO secretary-treasurer Liz Shuler took to Kotaku with a post that asks workers in the games industry to fight for adequate pay, sensible work hours, and against toxic work conditions. “We’ve heard the painful [...]

  • Take on the Demogorgon in 'Stranger

    Take on the Demogorgon in 'Stranger Things' Dungeons and Dragons Set

    Hasbro will release a “Stranger Things” inspired Dungeons & Dragons starter set this spring, according to a press release. The starter kit has everything players need to start playing Dungeons & Dragons: A “Stranger Things” adventure book, a rulebook, five character sheets, six dice, a Demogorgon figure, and an additional, paintable Demogorgon figure. The starter kit will [...]

  • Tencent Wants to Bring 'Apex Legends'

    Tencent Wants to Bring 'Apex Legends' to China (Report)

    Tencent Holdings is in talks with Electronic Arts to distribute the publishers’ “Apex Legends” in China as of Friday, according to a “person with direct knowledge of the matter” the South China Morning Post reported. Tencent, video game industry giant, already distributes top battle royale games “Fortnite” and “PlayerUnknown’s Battlegrounds” in China. While Tencent is [...]

  • Pokemon Go

    Proposed 'Pokémon Go' Lawsuit Settlement May Remove Poké Stops, Gyms

    A proposed settlement in the class action lawsuit against “Pokémon Go” developer Niantic could remove or change a number of Poké Stops and Gyms in the popular augmented reality game. The proposed settlement was filed in a California court on Thursday and applies to anyone in the U.S. who owns or leases property within 100 meters [...]

  • 'Minecraft' Mobile Just Had Its Best

    'Minecraft' Mobile Just Had Its Best Year Yet

    Last year was the most profitable year to date for the mobile versions of “Minecraft,” according to a report from Sensor Tower. “Minecraft” on the App Store and on the Google Play store pulled in $110 million through both purchase price of the app as well as in-app purchases. This is a 7% growth from [...]

  • 'Bayonetta 2' Director Leaves Platinum Games

    'Bayonetta 2' Director Leaves Platinum Games After 13 Years

    “Bayonetta 2” game director and “Bayonetta” producer Yusuke Hashimoto is leaving Platinum Games after 13 years, he announced in a tweet on Thursday. “This tweet will be a little more personal than usual. Yesterday, January 31st, was my last day at PlatinumGames,” he said. “The memories I made during my 13 years at Platinum, working [...]

  • AFV

    'Fresh Prince' Actor Denied Dance Copyright in 'Fortnite,' 'NBA 2K16' Lawsuits

    “The Fresh Prince of Bel-Air” star Alfonso Ribeiro has been denied a copyright for the “Carlton” dance, which is the focus of lawsuits the actor recently filed against “Fortnite” developer Epic Games and “NBA 2K16” publisher Take-Two Interactive, The Associated Press reported on Thursday. The denial from the U.S. Copyright Office was revealed on Wednesday [...]

More From Our Brands

Access exclusive content