Increasing game software demand assures bright future for GameStop

GameStop Corp., which specializes in PC entertainment and video game software, is the gaming industry's biggest company in the United States. They are also included in the list of the five biggest companies in the toy retail sector. Aside from softwares, they sell video equipments both old and new. They have around 1,750 stores located throughout 49 states. Some are situated in shopping malls, while others are in shopping districts. Their online magazine titled Game Informer has over 1.5 million subscribers.

GameStop had been rebranded a couple of times. The most notable of which is Babbage's, Inc., in honor of the British mathematician Charles Babbage. Gary M. Kusin and James B. McCurry can be credited for founding the company. After a series of turndowns from capitalists, Ross Perot agreed to finance their idea in February 1983. He offered a credit line worth $3 million in exchange for an ownership of one-third of the company. The first store, located in a regional mall at Dallas, opened in 1983 during Memorial Day. It is at this time that the two men tested their strategy that included four essential elements: a flexible design of the store with specific sections for different entertainment and computer system platforms, constantly updated well-rounded combination of products, reasonable prices and a professional yet pleasant staff that can explain in layman's terms all the technical terms in the industry. They got their return of investment only after 2 months since opening.

In 1989, they started experiencing losses but recovered on the first quarter of 1990. After GameStop's launching in October of 1999, Babbage's was sold to Barnes & Noble to the tune of $215 million. Through the continued leadership of Richard Fontaine, the company expanded dramatically between 2002 and 2003. They posted a record high of $1.58 billion in sales and $63.5 million in profits in 2003, and the most impressive thing is they were making revenues every quarter, when previously they were only profitable on holidays. 2004 saw GameStop opening an additional 230 stores. They became fully autonomous from Barnes & Noble during the last quarter of that year and moved to a larger office building. The future perspectives for the company are looking bright as there is more positivity because of the continuously increasing base for installed hardware.