Ava AbbottGameStop is a one-stop-shop for video games, consumer electronics, and gaming merchandise. The company was founded in 1984 by James McCurry and Gary M. Kusin. The founders adopted the name Babbage’s and switched to GameStop in 1999.
Based in Grapevine, Texas, GameStop expanded to become one of the largest video game retailers globally. In 2021, the company had around 12,000 full-time employees, over 20,000 part-time workers, and 4,816 stores.
About 3,190 GameStop stores are in the US, 950 in Europe, 253 in Canada, and 417 in Australia and New Zealand. GameStop operates under different brands outside the US, like EB Games, Micromania-Zing, ThinkGeek, and Zing Pop Culture. The company’s revenue declined by 21.28% in 2021 to $5.09 billion. [1]
GameStop faced and overcame numerous hurdles throughout its history. In the mid-late 2010s, the company’s performance declined as video game sales shifted online. GameStop’s investments in smartphones failed to deliver the desired outcome, while competitors capitalized on online shopping and downloads.
In 2021, GameStop rose to fame after Reddit users under the r/wallstreetbets forum invested in its stocks. This short squeeze rallied GameStop’s stock price to record highs and raised enough cash to pay off all its long-term debt, with $1.78 billion cash-in-hand.
GameStop invested in rebuilding and strengthening its e-commerce. But the company faces stiff competition from rivals, such as Best Buy, Amazon, Sony, Microsoft, eBay, and Nintendo. [2]
Here is an in-depth analysis of top GameStop’s competitors and alternatives:
1. Best Buy
Year founded: 1966
Headquarter: Richfield, Minnesota
Best Buy is the leading consumer electronics chain in North America. The company started as a music retailer and expanded its offerings to include electronic products, video game systems and software, and gaming accessories. In 2021, Best Buy had 102,000 employees and generated $47.26 billion in revenue.
Best Buy and GameStop sell video game systems, software, and accessories. However, Best Buy has been building its e-commerce capabilities since CEO Hubert Joly launched the Renew Blue initiative in 2012.
This approach integrates e-commerce into Best Buy’s network to enable BOPIS (buy online, pickup in-store). Renew Blue also enhanced employee training, revamped Best Buy’s inventory system, and remodeled its stores to expedite delivery.
GameStop offers more games than Best Buy. However, Best Buy entered the gaming industry before GameStop and attracted a cult-like following among avid gamers. Best Buy is the top GameStop competitor and alternative across the board. [3]
2. Amazon
Year founded: 1994
Headquarter: Seattle, Washington
Amazon is the world’s largest online retailer. The e-commerce giant offers consumer electronics, digital and physical games, and gaming merchandise. In 2021, Amazon had around 1.5 million employees and generated $469.82 billion in revenue.
Amazon’s revenue more than tripled in the past five years, while GameStop’s business was cut in half. The main competitive advantage for Amazon is its extensive delivery network. Amazon offers free shipping and delivers customers’ orders quicker than GameStop.
Gamers can find new and used games on the marketplace offered by in-house retailers or third-party sellers. In 2021, GameStop leased a 530,000-sq-ft fulfillment facility in Reno, Nevada, to shorten its delivery times.
This move can help GameStop undercut Amazon’s advantage. But GameStop won’t catch up to Amazon any time soon. Amazon is the top GameStop competitor and alternative in online game sales. [4]
3. Walmart Inc.
Year founded: 1962
Headquarter: Bentonville, Arkansas
Walmart is the world’s largest discount department chain. The retail giant has around 10,593 stores globally, more than double GameStop’s stores. In 2021, Walmart had 2.3 million employees and generated $559.2 billion in revenue.
The main competitive advantage for Walmart is its affordable prices. Gamers can buy video games and gaming merchandise at a lower price than GameStop. However, GameStop offers more variety of gaming and electronic products than Walmart. Both companies use exclusive passes for the latest video games.
During Walmart’s Exclusive Access Savings events, Walmart+ subscribers get early access to PlayStation 5 restocks. GameStop’s premium membership PowerUp Rewards Pro allows gamers to skip to the front of the PS5 line. But GameStop membership costs $15 a year, while Walmart+ goes for $98 per year. Walmart’s affordable prices can poach some gamers from GameStop. [5]
4. Sony Corporation
Year founded: 1946
Headquarter: Minato City, Tokyo, Japan
Sony provides audio and video electronics and IT products globally. The company manufactures consumer electronics and video games, and PlayStation consoles. In 2021, Sony had 109,700 employees and made $84.59 billion in revenue.
Sony and GameStop are partners and competitors. Gamers can purchase Sony’s PlayStation and gaming merchandise via GameStop stores. Gaming companies like Sony lose money on gaming consoles and profit from subsequent sales of accessories and games. For example, PS5 costs $450 to produce, but Sony sells them to GameStop for about $445.
Sony has a revenue-sharing agreement with GameStop of up to 10%. But Sony also sells video games and consoles directly to consumers via official Sony stores. So, Sony and GameStop are B2B partners and B2C competitors. [6]
5. Microsoft
Year founded: 1975
Headquarter: Redmond, Washington
Microsoft is a leading consumer electronics manufacturer and the second most valuable company globally, with a $2 trillion market cap. Microsoft has 182,268 employees and develops Xbox gaming consoles, PC and mobile-based games, and gaming accessories. For FY 2021, Microsoft’s annual revenue was $143.02 billion. [7]
Like Sony, Microsoft partners and competes with GameStop. But Microsoft only offers its gaming products, while GameStop is a one-stop-shop for video games, gadgets, and gaming merchandise. GameStop stocks Xbox, PlayStation, Nintendo, and other consoles under one roof, increasing its competitive advantage.
On the other hand, Microsoft sells directly and indirectly to consumers via its stores and GameStop retail competitors like Best Buy, Amazon, Walmart, and Target. Overall, Microsoft is a formidable GameStop competitor.
6. Target Corporation
Year founded: 1902
Headquarter: Minneapolis, Minnesota
Target is a big box department store chain and the eighth largest retailer in the US. The company offers a wide range of products, including electronics, video games, and gaming merchandise.
In 2021, Target had around 409,000 employees and accumulated $99.6 billion in revenue.
Target is exploiting the growing digital gaming market. In 2020, the retailer unveiled the Game Room. This futuristic video gaming space allows gamers to explore the latest sites and gadgetry. The concept is similar to GameStop’s store remodel program that attracts gamers to new online games.
Both initiatives provide gamers with the opportunity to interact with emerging technology and acquire hands-on experience with the latest video games. Target is one of the most innovative GameStop Competitors and Alternatives. [8]
7. Nintendo
Year founded: 1889
Headquarter: Kyoto, Japan
Nintendo evolved from manufacturing handmade playing cards to digital electronic products. The company has around 6,200 employees and a cult-like following among experienced gamers. In 2021, Nintendo generated $16 billion in revenue. [9]
Nintendo distributes its video games and gaming consoles via GameStop stores. But the company also sells directly to consumers via online and offline channels. Gamers can subscribe to Nintendo Switch Online plans; the Basic Plan for $4/month or the Family Plan for $35/month.
They can also get Nintendo’s Expansion Pack for $50/year to access classic games, such as Nintendo 64, NES, SNES, Sega Genesis, and Animal Crossing. The company offers Nintendo Life that covers all the latest gaming news, reviews, and features. These online offerings can entice GameStop customers to purchase directly from Nintendo. [10]
8. eBay
Year founded: 1995
Headquarter: San Jose, California
eBay is the second-largest online marketplace in the US after Amazon. The platform offers C2C and B2C selling, including new and used electronics, games, and accessories. In fiscal 2021, eBay reported a 39% surge in revenue to $11.74 billion.
eBay doesn’t sell its own products but connects buyers to sellers, while GameStop deals directly with customers via its stores. Instead of buying newly released games, consumers can wait for other gamers to list used games on eBay. But GameStop can undercut eBay’s competitive edge by expanding its catalog of used games.
eBay uses an auction-style model, so buyers can land the best deal on games and gaming merchandise. As the oldest e-commerce company globally, eBay has enough experience to grab GameStop’s market share. [11]
9. Valve
Year founded: 1996
Headquarter: Bellevue, Washington
Valve is a gaming company that develops and distributes video games. It is one of the most popular virtual game developers in this sector. With 203 employees and $106.45 million in sales, Valve still has a long way to catch up to GameStop.
Valve delivered its first handheld games console in Feb 2021, known as Steam Deck. The Steam Deck uses Valve’s Proton software that allows gamers to play unsupported Windows games on the device.
Valve offers its gaming products via GameStop and other retail stores. But gamers can also buy the latest games and upgrades on Valve’s sites. Early access and online offerings increase Valve’s competitive advantage over GameStop. [12]
10. Epic Games
Year founded: 1989
Headquarter: Cary, North Carolina
Epic Games evolved from a tech help site to a gaming and developer platform. The company offers online shooter-type games and a game engine that allows developers to create and license games.
In 2021, Epic Games had 3,200 employees and accumulated $840 million in revenue. Third-party games contributed about $300 million, representing 36% of total sales.
Epic Games Store provides selected and strategic games for free download for one week. In Feb 2022, gamers got the opportunity to download Cris Tales for free via the Epic Games Store.
Cris Tales is an RPG released in 2021 and retails for $39.99 in outlets like GameStop. These free downloads can help Epic Games poach some gamers from GameStop. [13]
References & more information
- Top GME (2022, Jan 1). GameStop Revenue 2010-2021. Macro Trends
- Tatevosian, P. (2021, Sep 18). Is GameStop’s Growth Investment Good News for Shareholders? The Motley Fool
- Munarriz, R. (2021, Apr 6). Is GameStop the Next Blockbuster, Amazon, or Best Buy? The Motley Fool
- Munarriz, R. (2021, Apr 12). Better Buy: Amazon vs. GameStop. The Motley Fool
- Learish, J. (2022, Feb 24). Walmart PS5 restock: What you need to know to score a PlayStation 5. CBS
- Kozin, D. (2020, Oct 21). GameStop has Digital Revenue Sharing with Sony. Seeking Alpha
- Clark, M. (2021, Jun 24). Microsoft is now a $2 trillion company. The Verge
- Duprey, R. (2020, Mar 11). Is This New Target Store a Threat to GameStop’s Future? The Motley Fool
- Alsop, T. (2022, Feb 8). Nintendo: net sales 2008-2021. Statista
- Keane, S. (2022, Feb 25). Nintendo Switch Online Expansion Pack. CNET
- Warren, R. (2022, Feb 10). Is eBay a Top Stock to Buy and Hold in 2022? The Motley Fool
- Market Line (2021, Dec 14). Valve Corp seeks to disrupt the games console market with its Steam Deck. Verdict
- Moore, L. (2022, Feb 24). Epic Games Store Makes 2021 RPG Completely Free. Comic Book
- Featured image by Clay Banks
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