The Game Stops Here
Four years ago while working in marketing for Pepsi, they sent dozens of us to a mysterious off-site in the Meat Packing District in Manhattan for a day that they said would "reshape the way we thought about sports." We were excited at the thought of spending time mingling among NFL superstars, baseball legends, and soccer greats. But when we entered Samsung 837, we were greeted not with athletes who'd spent years in the gyms and on the playing fields perfecting their bodies and their athletism, but pale and skinny children who'd spend years in their rooms and basements.
We were told quite succinctly: these kids were the future of sports. Each was a renowned esports player, and they would spend the day telling us the enormous impact online gaming was having on the world. We scoffed. Sure, we knew of esports and were generally aware that its popularity was increasing, but there was no way it would hold a candle to the NFL or NBA.
Then, they showed us the numbers (updated for 2020):
Esports Revenue in 2020 was $950.3m
There were 443 million esports viewers in 2019. (A total audience of 646 million is expected by 2023)
The annual growth rate for esports popularity is 10.4%.
Esports has a bigger audience than the Super Bowl.
On top of all that, 43% of esports fans have an annual income of $75,000+ making them a much-coveted demographic for advertisers.
And suddenly, we realized we needed to get smart about this world very quickly. Our brainstorms began to focus less on Monday Night Football advertising and more on Twitch promotions. Our vocabulary changed, and words and terms such as "casting," "DPS," and "nerf" entered our lexicon. We knew who the big teams were, what games were most popular, and when major game releases would occur. The world was spinning forever forward, and we needed to make sure we weren't left behind.
Being left behind, of course, brings me to the crux of this article: GameStop. They've seen their stock price get sliced in half over the past five years. And despite a brief surge during the pandemic, the outlook for the gaming retailer is bleak. Both Sony and Microsoft have released their new consoles this past month and both offer disc-free options - meaning you no longer need to go in-store to buy a game. Simply download it via the built-in online store on the console and it'll be on your hardware in a matter of minutes. Great for the user, bad for a brick and mortar store whose revenue is mostly dependant on selling physical copies of games.
There was a time when kids (and uninformed parents) would head into a video game store like GameStop and ask for recommendations, tips, and industry news from the dialed-in employees. But with the rise of Twitch and the proliferation of video game reviews online, the need for in-store gaming experts is vastly outdated.
But there is hope for GameStop. In a word: eSports.
Miles Spencer once told me, "During a gold rush, sell shovels." And this is the exact advice GameStop needs right now. They are in a unique position to pivot from selling video games to selling ancillary video game gear. More directly: eSports gear. These teams have jerseys, bobbleheads, hats, books, toys, and even their own energy drinks. GameStop needs to become the Fanatics of the gaming world. They should enter into exclusive partnerships with the major esports leagues and teams, and provide gear fans can't get anywhere else.
Second, become a streamer outfitter. Games may have gone digital, but the way players interact with them remains very tangible. GameStop would do well to concentrate on the sale of hardware - and not just consoles and controllers. They should sell streaming cameras, microphones, lighting rigs, and digital screens. Help burgeoning streamers buy packages that get them up and broadcasting to the world easily. Become the place that sells essential gear to those who want to be the next eSports champions.
Finally, and perhaps painfully, close the brick and mortars. They are woefully analog in an increasingly digital world. Physical copies of games are on the extinction list, and the time has come to find a new avenue. Additionally, players (and parents) aren't coming in for advice or recommendations when they can just as easily find them with the click of a button. Close the stores, reduce the overhead, and shrink in order to grow.
The decisions GameStop makes in the next few months will be imperative to its success. It has the credibility to push forward into new territory and become the leader in a growing sport. What it chooses to do and how it chooses to do them could be the difference between an extra life and game over.
