GameStop Up For Sale As Internet Takes Over Video Game Marketplace

As market trends shift away from physical video game sales in favor of direct downloads, the biggest remaining dedicated gaming retailer is up for sale. GameStop announced Tuesday that the Texas-based company is in “exploratory discussions” with possible buyers.

GameStop announced the news in a press release on its website. The release is only three sentences long and gets straight to the point.

“GameStop Corp.(NYSE:GME) today confirmed it is in exploratory discussions with third parties regarding a potential transaction. There can be no assurance any agreement will result from these discussions. GameStop does not intend to make any additional comments regarding these discussions unless and until it is appropriate to do so.”

The Fort Worth, Texas-based company also emphasized that it could potentially walk away without a sale in place.

One potential suitor is Sycamore Partners, according to Bloomberg. Bloomberg said GameStop could be picked up by a private equity firm.

Originally founded in 1984 as Babbage’s, GameStop took advantage of the game industry’s meteoric rise from the mid-1980’s and beyond to become a massive, ubiquitous retailer. In 2005, GameStop bought EB Games and became the de facto place to buy games in the U.S. However, recent years have caused rampant speculation about the company’s future in a world dominated more and more by the internet.

Like an increasing number of businesses, GameStop now has to compete with the convenience of Amazon’s delivery services. Amazon Prime members can have brand new video games delivered to their doorsteps on the day they come out, and if they order them within a certain window of release, they are discounted by 20 percent.

However, even if Amazon Prime did not exist, GameStop’s viability in the marketplace would be in serious danger. Every major video game console on the market gives players the ability to directly download games over the internet, bypassing the need for discs or cartridges.

Major video game publishers like Electronic Arts and Activision are starting to see hit games like “Destiny 2” sell just as much digitally as they do physically. GameStop tried to counter this trend by offering more merchandise, like figurines and t-shirts, but that did not change the company’s fortunes.