The venerable retailer of video games, GameStop, is undergoing a drastic makeover as Ryan Cohen, the wealthy founder of Chewy, assumes the role of CEO. As the business battles financial difficulties, Cohen emphasized the importance of “extreme frugality” and cautioned against “time wasters” in his first email to the workers. Cohen has been associated with GameStop since 2021, but the business has had trouble turning a profit. Diversification initiatives, such as forays into online deliveries, NFTs, and non-gaming products, have not produced appreciable profits. The industry-wide transition from physical game sales to digital downloads continues to be a barrier to GameStop’s financial success.
The corporation is now facing further uncertainty as a result of the recent departures of numerous key executives, including Cohen’s own nominee for CEO, Matt Furlong. Even though it still has over $1 billion in cash on hand, partly thanks to the meme stock phenomena, GameStop started many waves of layoffs in 2022. Cohen’s directive to the workforce was direct and unyielding: “Every expense at the company must be scrutinized under a microscope, and all waste must be eliminated.” He emphasized that GameStop must run well and financially and that employees must respect corporate funds as their own.
GameStop faces formidable obstacles
Given that digital downloads are outpacing physical sales, GameStop faces formidable obstacles. To make matters worse, secret material indicates that Microsoft might do away with disc drives in upcoming Xbox consoles. In GameStop stores, collectibles like Funko Pop! have increased shelf space, but they haven’t been able to make up for the falling used game sales.
The new CEO of GAMESTOP has outlined new objectives and is committed to the survival of the business as a whole. Just hours after taking office, CEO Ryan Cohen released a business email outlining his expectations for himself and the staff as they seek to stabilize GameStop.
Transforming the Business
Ryan Cohen was appointed CEO on Thursday and will not be paid for his work. He founded the online pet food business Chewy and served as GameStop’s executive chair before that; his company, RC Ventures, owns a 12 percent investment in GameStop. Cohen claimed that cutting wasteful spending is his top priority and that he has no time for it. He stated this in an email sent to corporate staff members and store managers that CNBC was able to get. “Our job is to make sure GameStop is here for decades to come,” he wrote.
Since 2022, the business has closed about 133 stores, according to a GameStop blog. Cohen wants to transform the business. Before the advent of online gaming shopping, GameStop was a successful retailer of video games, gaming consoles, and other gaming-related goods. GameStop has looked into various business opportunities, such as an NFT marketplace and a collaboration with the cryptocurrency exchange FTX. But FTX has now declared bankruptcy.