Game Stop? The Death of the Retail Game Store.
Video games are one of the most popular entertainment sources in the world, with the gaming industry bringing in an estimated $116 billion last year. Video games have been popular in American homes since the 1980s, and the fascination has only continued to grow thanks to a wide variety of game options, consoles, and technology that have made playing games more interactive than ever.
It’s not just the U.S. that has an obsession with gaming. Globalization is a huge factor in the world of video games. It has allowed people from all over the world to connect, and it has taken away some of the stigmas that were attached to “gamers” for many years – assuming they were just “nerds” or that video games were nothing more than a lazy-day activity.
While the gaming industry shows no signs of slowing down, how gamers are getting their content seems to be changing. Generation Z (those born in 1997 and beyond) are the next big group of game purchasers, and they way they purchase and play video games is different than the generations before them. Specifically, they’re more likely to shop online for a new game than go to a brick-and-mortar store. As this generation and the next drift more toward online purchases, can we expect retail video game stores to disappear?
Amazonian Expansion
Why are more people turning away from retail shops and buying their games online? There are several reasons, but the biggest one is convenience. While shopping online is nothing new, it’s become easier than ever thanks to smartphones and the wide availability of different products. Social media advertising has also contributed to this, with things like Facebook ads and boosted posts contributing to conversions.
E-commerce makes it incredibly easy to shop for and find the exact product you’re looking for in a matter of minutes. When you can do that from the palm of your hand, it’s easier to buy more, and not waste time. Again, because Generation Z is so “plugged in,” they know how easy it is to shop on their phones, so they’re more likely to go that route when it comes to games.
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Aside from convenience, online shopping is often more eco-friendly. This generation is aware of the problems facing our world, like global warming and pollution. So, as companies start to take the initiative to go green, people are more willing to make changes, too. When you shop online, you reduce the amount of resources needed to get you the game you’re looking for. Yes, transportation plays a factor in carbon emissions, but companies are getting smarter about the way they package and ship products.
Finally, online shopping is often cheaper. With no overhead to worry about, companies can offer games at a lower price than GameStop trying to make a profit from their brick-and-mortar store. On top of that, you don’t have to wait in long lines to get the latest game. No waiting and getting the game at a lower price? It’s easy to see why the next generation prefers digital shopping.
The Future of E-Commerce
In 2018, retail e-commerce sales in the United States alone reached over $500 billion. So, while the first online transaction may have happened many years ago, it’s shown no signs of slowing down ever since.
Amazon alone counts for over 50% of e-commerce growth, because it takes advantage of what people are looking for in products online. It’s easy to use, it can be done on a phone, and it has just about every type of product you can think of.
When it comes to video games, the facts are similar. In 2013, sales of digital video games started to exceed the number of disc sales. In 2016, digital sales made up 74% of all video games purchased. As more video game manufacturers and production companies take note of these trends, they’re likely to start introducing games solely online, or for digital download.
Brick and Mortar Demolition
Unfortunately, due to the popularity of online shopping, brick-and-mortar stores have taken a hit. GameStop is one of the most recognizable retail video game stores in the world, but even their physical sales have started to drop.
Recently, GameStop reported that its fourth-quarter sales fell 7.1% compared to the previous year. Retailers like Amazon have made it easy to buy games with just one click, making it harder for GameStop to appeal to a younger generation of shoppers.
With companies like Google bringing up the idea of video game streaming services, brick-and-mortar video game stores will likely continue to struggle and could become obsolete. GameStop has toyed with the idea of going up for sale before, and it’s likely they’ll do it again if they want to salvage the company. But, they’ll need to come up with a way to appeal to a younger generation who is more interested in digital games and online purchasing than stepping into a store.
