GameStop Company Turnaround and Transformation
Since 2021, GameStop has been undergoing a transformation: new leadership, fewer stores, renewed profitability, higher value
- In the years preceding 2021, GameStop was a struggling company that was losing hundreds of millions of dollars per year, and was commonly believed to be headed towards bankruptcy
- In 2021, the entire board of directors was replaced; Ryan Cohen became the chairman, and eventually the CEO in 2023
- The company continues to close stores, focusing on fewer, more profitable locations
- Although revenue is down significantly since its peak, GameStop achieved net profitability for the first time in six years in fiscal year 2023, and significantly increased profitability in fiscal year 2024
- GameStop raised nearly $3.5 billion from 3 at-the-market offerings in 2024, and another $4 billion from 2 private convertible senior note offerings
- GameStop is evolving its legacy business model; since 2024, GameStop has placed increased emphasis on graded trading cards
- Core financial metrics show significant improvements to the company since the turnaround efforts began
- GameStop now has the highest stockholders' equity in the history of the company
- GameStop is now on track for full-year operational profitability after 7 consecutive years of operating losses
- GameStop is on track for its most profitable year in the history of the company
Generally the business is much more efficient. It's gonna be a smaller — less stores — but more profitable company.
Most importantly, we're generating profits every single quarter now.
Typically in the past GameStop has only made money in Q3 and Q4, and actually, when I joined the board and before I joined the board, GameStop was losing money every single year.
It's hard to appreciate what a piece of crap the business was when I joined the board and what was going on in the boardroom and management. But, we're making progress.
GameStop was struggling. The company was losing hundreds of millions of dollars per year, with too many stores and dwindling revenue. The company had a poor outlook, and the prevailing sentiment was that it was doomed to bankruptcy.
A social media and stock market phenomenon that began with Keith Gill in 2019 drew much attention and enthusiasm towards GME on platforms like Twitter (now X), YouTube, and Reddit. This brought a large number of new investors to GME, many of which ultimately becoming long-term shareholders who directly registered their shares. 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.
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, providing insight into the direction that he believed GameStop should take, 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.
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 to a video game industry that was increasingly moving to digital game sales.
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 modernized its online store and strengthened its omnichannel experience, including the introduction of same-day delivery — an option that GameStop didn't have before which is now standard and expected among major online retailers.
From June 2021 to June 2023, Matt Furlong was the CEO of the company. On Furlong's exit, Ryan Cohen temporarily became executive chairman.
In September 2023, Ryan Cohen became the CEO of the company. At this time, he sent an email to all GameStop employees titled "Survival," that had a serious and relatively bleak tone.
It is not sustainable for GameStop to operate a money losing business. The mission is to operate hyper efficiently and profitably. Our expense structure must allow us to endure any adverse scenario. Whether it's a difficult economy or revenue deceleration from shrinking software, we must be profitable. Our job is to make sure GameStop is here for decades to come.
In December 2023, the board approved a new investment policy which gave Ryan Cohen the authority to manage the company's investment portfolio.
In 2024, GameStop began selling new original products such as Candy Con controllers and the Raptor 8 mobile gaming controller.
More significantly, GameStop is expanding into the graded trading card market, broadening its total addressable market and reducing reliance on declining hardware and software sales.
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.
A look at the core financial metrics shows significant improvements to the financial health of the company since the turnaround efforts began.
| Pre turnaround FY 2020 | Status as of FY 2024 results | |
| 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 continues to close more stores every year, a trend that began before the initiation of the company turnaround. As GameStop closes stores, revenue has also been in decline, but is showing signs of stabilizing.
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.
While operating income has seen significant improvement, it was still negative in fiscal year 2024. GameStop has generated $97M in operating profits so far in fiscal year 2025, and is well on track for full-year operating profits for the first time in 8 years.
There is growing evidence that beyond simply cutting costs and improving the efficiency of the legacy business, 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 stated that "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."
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 the legacy business shrinks, GameStop has increased its focus on capital allocation and strategic investments.
GameStop raised over $4 billion through 2 private convertible senior note offerings in April and June 2025.
In May 2025, GameStop announced that it had acquired 4,710 BTC.
Maybe the future value when you think about GameStop ... may have more to do with how we deploy our balance sheet than the cash that the retail operations will generate.
