Uh... games.
So how bout them Gamestops, eh? Or as I sometimes prefer to call it, Blockbuster 2. Three days ago the interim CEO/CFO/COO abruptly resigned after the board rejected a compensation overhaul for store managers (who previously got a steep pay cut a few years ago). This added him to a long list of high-profile departures in recent years, most notably a CEO last year who only lasted three months. Apparently it doesn't matter how inbred the rats are, they can still figure out when the ship is sinking.
You might be asking, why did I call Gamestop "Blockbuster 2"? That's a delightful question. Thank you for asking.
Blockbuster was a widely misunderstood failure. The popular narrative is that Blockbuster was outcompeted by Netflix (usually accompanied by that delightful story about how Blockbuster refused to buy Netflix because they didn't understand streaming, and, as apparently required by law, always neglecting to mention that Netflix was a damn mail order business at the time). This isn't what really happened. The truth is actually much more interesting: Blockbuster was outcompeted by Walmart.
Blockbuster never made money from rentals. They bought rental copies from the movie studios at cost ($3-4 each) and, in exchange, Blockbuster paid the rental revenue back to the movie studios. Blockbuster made money from two places: late fees and retail. Late fees were in year over year decline; management had a pretty good idea that the future of the company had to be retail. And the best retail for them? Previously rented movies. Their cost was $3 a copy, they sold them at damn near full retail prices, and they didn't have to pay the movie studios any of it. It was almost pure profit.
Remember that "End of Late Fees" thing? That was never about late fees. That was actually about growing PRP sales. Instead of charging late fees if you kept a movie late, the company billed it to you as a sale of previously-rented product. The company figured a certain percentage of people would just go with it. Pretty damn scammy, and Blockbuster ended up losing a lawsuit over it. But that shows their priorities at least.
So where'd this all go wrong? Walmart started selling movies as a loss leader. "Loss leader" is a high-falutin' retail management term for "anticompetitive business practices". Basically, Walmart sold movies below cost in order to drive sales of other products (this was partly fueled by movie studios offering Walmart reduced DVD wholesale rates). Blockbuster's management had been betting the company on moving previously rented movies for $17.99... but, meanwhile, Walmart was selling the same movies brand new for $14.99. Compounding the error, Blockbuster's management allocated ever more floor space for used product, and more and more wall space for these discounted Hollywood releases (and ever less for smaller titles that weren't subsidized). Desperately chasing this scheme that would never work. They gradually undermined the very reason people were going to Blockbuster to be exposed to PRP in the first place.
All of this happened way before Netflix streaming was a thing. Blockbuster probably would have gone out of business eventually, but the company was walking dead for a decade by the time Netflix mattered. The idea that streaming killed Blockbuster is pure fiction. And it's historical revisionism by analysts desperate to hype up a Silicon Valley unicorn that's frankly a kinda boring idea now.
Okay, that's a lot of words about not-games, but I'm getting to the point. I call Gamestop "Blockbuster 2" because it's another situation where the public/media perception of the company's pending collapse is completely wrong. People are saying Gamestop is failing because of digital distribution. It ain't. Gamestop has been failing for more than a decade and it's failing for the same reason Blockbuster did. Back in the '00s they bet the company on deceptive schemes to source a cheap supply of used product and resell it at basically full price, let it crowd out the new release variety that gave people a reason to come in, and now they're reaping what they sowed. Plus both companies had abusive, incompetent management. Plus both companies paid far less than even Walmart. So everybody who ever worked at either company hated it, and when you shopped there it really showed. Plus nobody in management at either company had any subject matter knowledge. (Bonus: go look at photos of Gamestop's recent CEOs. I'm not saying octogenarian chain restaurant executives aren't allowed to enjoy video games, but let's be honest here, they probably don't care about them much more than Gamestop's board of directors does.)
And that's why they're Blockbuster 2.
Good riddance.