Got game?
For video gamers, first person shooters ain’t what they used to be.
Citing growing political correctness in both Canada and Europe, prominent video game retailer, GameStop Corp. on Tuesday announced plans to divest its Canadian and French operations as part of a strategic review of its international assets.
The decision was accompanied by pointed remarks from CEO Ryan Cohen, who criticized the ‘sociopolitical climates’ of both countries.
Shortly after posting a news release to its web site, Cohen took to Twitter (“X”) inviting potential buyers to express interest via email, adding: “High taxes, Liberalism, Socialism, Progressivism, Wokeness and DEI included at no additional cost if you buy today!”
Cohen’s comments reflect a growing sentiment among certain business leaders who view progressive policies and diversity, equity, and inclusion (DEI) initiatives as detrimental to corporate operations and shareholder returns.
The move is part of a broader strategy under Cohen’s leadership to streamline GameStop’s operations. Since assuming the role of CEO in 2023, Cohen has focused on reducing costs and enhancing long-term profitability, which includes downsizing the company’s physical store footprint.
Prior to the announcement, GameStop operated 203 stores in Canada and 647 across Europe.
That’s notwithstanding that physical sales of video games are headed the same direction as VHS video stores like Blockbuster.
GameStop’s financial performance has been under scrutiny, with the company reporting a net income of USD$17.4 million in its third quarter, a turnaround from a loss in the same period the previous year. However, sales declined to $860.3 million, indicating ongoing challenges in the ‘evolving retail’ landscape.
Canada represented about 5% of the total, or about $46.3 million. European revenues were about $173 million, or about 20% of the total. There was no indication of what those operations would be worth or what the company would be prepared to sell them for.
The company gained widespread attention in early 2021 during the ‘meme stock’ phenomenon, where retail investors, coordinating primarily through social media platform Reddit drove up GameStop’s stock price dramatically, to more than $500 per share.
At one point it doubled within a 90-minute period.
The surge led to significant financial consequences for hedge funds engaged in short selling. Elon Musk, CEO of Tesla and SpaceX, weighed in on the situation at the time, criticizing the practice of short selling as a “scam legal only for vestigial reasons.”
As GameStop continues to navigate the complexities of the global market, its strategic decisions and leadership commentary underscore the ongoing debate over the impact of sociopolitical factors on business operations.
Not to mention the decline of physical video games themselves.
GameStop shares were down about two bits on the New York Stock Exchange Wednesday, to $26.66.