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Gamestop Corporation Case Study

843 Words4 Pages

Although GameStop Corporation (NYSE: GME) has not been around for very long, they have had a rather rich history. Their roots can be traced back to an old store by the name of Babbage’s, which was a small retail store that sold software and was based in Dallas, Texas. However, Babbage’s was then acquired by Barnes & Noble, which subsequently also acquired Funco, Inc, a similar software company. However, near the end of 2000, Funco changed their name to GameStop and the company offered their first public shares two years later. In 2004, GameStop spun off of Barnes & Noble through a 6 million share buyback plan. GameStop officially became a corporation on April 13, 2005. Ever since then, GameStop has had a long list of their own mergers and …show more content…

In this past second quarter, GameStop generated $565.5 million in used video games sales. Their total gross profit for the quarter was $516.8 million and $260 million came from the used video game profits. This is the case because used video games are much more profitable for companies when compared to new games. Profit margins for used video games sold are all the way up to 46.8% as the profit margins for new video games sold are only 21.3%. These percentages are a big reason why they have a large market capitalization number for their industry at $4.6 …show more content…

In 2014, GameStop came up with a new business unit that is called the GameStop Technology Institute. Its purpose is to come up with business innovations and solutions to make sure the GameStop customer gets what they want and need. One of their innovations and development processes is being able to fix and resell broken electronics. The customer brings in their broken electronics and sells them to GameStop and GameStop quickly fixes the electronic and sells it on the market for a large profit. Most GameStop employees are able to fix any electronic from an old PlayStation to a new iPhone. Their knowledge as a corporation serves as a competitive advantage against all other companies in the video game

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