Two years ago, GameStop hired Matt Furlong as its new CEO to focus on e-commerce due to declining demand for physical media. However, he was fired and Chewy co-founder Ryan Cohen became executive chairman.
As Kotaku reported, Cohen gained a fan base on Reddit at the height of the Wall Street scandal, and followers treated him as if he held the keys to homegrown success. He joined GameStop’s board in 2021 and became chairman in June of that year after selling his home delivery pet food business for billions, and many saw his posts as cryptic hints hinting at investment opportunities in the company.
Furlong was fired amid news that GameStop was back in the red. It turned profitable for the first time in years in March, but has since reported a $50.5 million loss while closing more than 800 stores in the past two years. The company even canceled its Q1 2023 financial conference call, and all it had to say on the matter was that its “former CEO has been fired.”
Cohen tweeted instead, “Not for long,” and one look at the comments shows that his devoted fan base treats him almost like an Internet celebrity. Speaking to CNBC, the Reddit user went so far as to say that “he’s the god figure of the meme-stock community.”
GameStop hasn’t had the best year so far — revenue is down, customers are increasingly switching to digital, making brick-and-mortar stores redundant, and costs are rising. We saw the results of this last year with massive layoffs, but they didn’t continue until 2023. To put the situation into perspective, the store manager, who goes by the name Red on TikTok, said it was dead before Christmas, picked up during the holidays and then died again right after the new year”.
GameStop tried a few things to make it profitable again, like hiring Furlong for his Amazon expertise to bring the store into the digital world, but it clearly didn’t work. Another strategy he dived headlong into was NFTs, a fad that has since died out. If you haven’t heard of them, they’re basically digital image receipts that cost hundreds and sometimes thousands of dollars, bought with cryptocurrency. You can also simply right-click and download the image for free without harming the environment.
This pressure brought a wave of backlash against GameStop, especially when it was found to be allegedly selling indie game NFTs without permission. With both of its main update-only strategies falling apart, it’s unclear where GameStop will go from here.
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