GameStop Company Turnaround and Transformation
Since 2021, GameStop has been undergoing a transformation: fewer stores, higher value, renewed profitability
- In the years preceding 2021, GameStop was a struggling company that was often viewed as likely heading towards bankruptcy
- In 2021, the entire board of directors was replaced; Ryan Cohen became the chairman
- The company continues to close stores, focusing on fewer, more profitable locations
- Although revenue has declined dramatically since 2018, GameStop achieved net profitability for the first time in six years in fiscal year 2023
- By raising nearly $3.5 billion from at-the-market offerings in 2024, GameStop built a large cash position, which has been used to earn substantial interest income that helps offset operating losses and sustain profitability
- Core financial metrics show significant improvements to the company since the turnaround efforts began
- GameStop is evolving its legacy business model; since 2024, GameStop has placed increased emphasis on graded trading cards
- GameStop is transforming into a capital allocator, with a growing focus on strategic investments
GameStop was struggling. The company was losing hundreds of millions of dollars per year, with too many stores and dwindling revenue. The prevailing sentiment was that the company was doomed to bankruptcy.
In 2020, Ryan Cohen purchased over 12 percent of the company, becoming the largest individual shareholder of GameStop. He wrote a letter to the then-board of directors urging a decisive pivot from the traditional brick-and-mortar approach to a more technology-driven model.
Ryan Cohen secured board seats and eventually ascended to the position of chairman of the board of directors in June 2021, replacing the entire former board with a new one that was aligned with his vision to modernize the company.
A social media and stock market phenomenon that began with Keith Gill in 2019 drew much attention and enthusiasm towards GME. This brought a large number of new investors to GME, many of which ultimately becoming long-term shareholders. Enthusiastic investing of GME entailed elevated share prices, which the company has been able to capitalize on and raise billions of dollars, greatly strengthening the financial position of the company.
By June 2021, Ryan Cohen and the new board of directors were in the position to initiate the turnaround of the company. This has involved extensive cutting of costs, closing of stores, and modernization of a company that had previously failed to adapt with the modern era.
We inherited a bunch of legacy everything, and under-investment across the entire business –- people, the entire technology stack, just decades of neglect, and so it’s hard to turn around a brick and mortar retailer that’s under the kind of pressure that GameStop was and continues to be under, but that was also part of the attraction going into GameStop was that a transformation the likes of GameStop was really unprecedented and I was motivated by that.
GameStop has made substantial efforts to upgrade and modernize its online store and enhance its overall omnichannel experience. This has included investing in a more user-friendly and mobile-responsive website, streamlining the checkout process, and improving product availability and search functionality. Additionally, the company has integrated buy-online-pickup-in-store and same-day delivery options.
From June 2021 to June 2023, Matt Furlong was the CEO of the company. On Furlong's termination / end of contract, Ryan Cohen became executive chairman on a temporary basis.
In September 2023, Ryan Cohen became the CEO of the company. In December 2023, the board approved a new investment policy which gave Ryan Cohen the authority to manage the company's investment portfolio.
In March 2024, the company reported fiscal year 2023 results, showing full-year profitability for the first time in 6 years.
Subsequently, the company was able to complete 3 at-the-market equity offering programs at relatively high stock prices, raising approximately $3.5 billion, increasing the book value per share of GME to nearly $11.
A look at the core financial metrics shows significant improvements to the financial standing of the company.
With respect to retail operations, we plan to continue reducing costs and focusing on profitability... This means a smaller network of stores with an expanded assortment of higher value items that fit into our trade-in model.
| Pre turnaround FY 2020 | Current status FY 2024 | |
| Store Count | 4,816 | 3,203 |
| Revenue | $5.1 B | $3.8 B |
| Operating Income | -$237 M | -$26 M |
| Interest Income | -$32 M | $163 M |
| Net Income | -$215 M | $131 M |
| Assets | $2.5 B | $5.9 B |
| Liabilities | $2.0 B | $0.9 B |
| Stockholders' Equity | $437 M | $4.9 B |
GameStop has raised cash and eliminated practically all of the debt that it had. Now holding a large pile of cash and equivalents, the company earns interest income rather than paying interest on debts.
GameStop continues to close more stores every year, a trend that began before the initiation of the company turnaround. As GameStop closes more stores, the revenue continues to decrease, as does the SG&A expenses.
While operating income has seen significant improvement, it remains negative.
In 2024, GameStop began selling new original products such as Candy con controllers and the Raptor 8 mobile gaming controller.
In addition to the release of new original products, GameStop has also expanded into the graded trading card market.
There is growing evidence that GameStop is undergoing a transformation into a more modern, technology-focused company.
As one example, on a GameStop job posting for a principal software engineer that was open on February 13, 2025, it states "GameStop is in the midst of a game-changing metamorphosis, transforming from old school into a modern company that is driven at its core by technology."
It is evident that GameStop is already a different kind of company than it was just a few years ago.
Do you remember when:
Berkshire Hathaway was a textiles company?
American Express was an express mail business?
Nokia was a pulp mill?
Samsung was a grocery trader?
Marriott was a root beer stand?
Instagram was a check-in app?
I don't - businesses evolve... Other examples?
As legacy retail contracts, GameStop evolves into a capital allocator with a growing focus on strategic investments.
