Ryan Cohen takes charge of the video game retailer after months of turmoil
Ryan Cohen, the billionaire founder of Chewy and the largest shareholder of GameStop, has officially become the new CEO of the video game retailer on Thursday. In his first email to the staff, obtained by Kotaku, he stressed the need for “extreme frugality” and warned against “delegators and money wasters” as the company faces a challenging future.
Cohen, who joined the board of directors in 2021 and became the executive chairman in June, has been the driving force behind GameStop’s transformation from a brick-and-mortar chain to an e-commerce platform. He has also been the catalyst for the “meme stock” frenzy that saw GameStop’s share price soar to unprecedented heights earlier this year, attracting millions of retail investors and online fans.
However, despite the hype and the cash infusion, GameStop has remained mostly unprofitable and has seen its sales decline as the gaming industry shifts to digital downloads and streaming services. The company has also undergone several leadership changes, including the firing of Cohen’s hand-picked CEO Matt Furlong in September.
Cohen calls for survival and profitability
In his email to the corporate employees and store leaders, Cohen did not mince words about the situation and the expectations. He added that prospering in retail means survival, and that if the company survives, it stays in the game.
GameStop faces uncertain future amid industry changes
GameStop’s survival, however, is not guaranteed, as the company faces fierce competition and changing consumer preferences in the gaming industry. The company has been trying to diversify its offerings by selling more collectibles, accessories, and electronics, as well as exploring new ventures such as NFTs, esports, and metaverse.
However, these initiatives have not yet proven to be enough to offset the decline in its core business of selling new and used games and consoles. According to its latest quarterly report, GameStop’s net sales dropped by 25.6% year-over-year to $1.18 billion, while its net loss widened to $61.6 million from $19.8 million a year ago.
The company has also been facing regulatory scrutiny and legal challenges over its stock trading and disclosure practices, as well as criticism from some analysts and investors over its lack of transparency and communication. GameStop has not held any earnings calls or provided any guidance since December 2020, and has not updated its website or social media accounts since June.
GameStop’s stock price, which closed at $16.84 on Thursday, has fallen nearly 9% this year, and is far below its all-time high of over $86 in January. The company’s market value, which peaked at over $33 billion in February, is now around $2.5 billion.