GameStop Shuts Down 590 Stores Across 12 States After $443M Bitcoin Bet Backfires

Between 390 and 470 U.S. stores will shutter in January alone across 42 states, with significant job losses expected. California, Texas, and Florida face the heaviest impact. Employees often discovered the news via door signs, with little prior warning, as the company accelerates closures before its fiscal year ends on January 31. This wave accounts for nearly 80% of last year’s total reductions of 590 stores, allowing GameStop to bundle costs like lease terminations, inventory sales, and severance into one period for clearer future reporting.

Digital Shift Reshapes Gaming Landscape

Video game sales have swung decisively digital, with 95% now via downloads and streaming, leaving just 5% for physical copies. Physical spending has dropped 85% from its 2008 high and halved since 2021. Console makers Sony, Microsoft, and Nintendo push digital-only hardware and their own stores, sidelining retailers like GameStop. Competitors dominate: platforms such as Steam, PlayStation Store, Xbox Store, and Nintendo eShop claim most sales; mass sellers like Amazon, Walmart, and Best Buy undercut on physical stock; and subscriptions like Xbox Game Pass erode purchases altogether.

Financial Pressures Mount Amid Cost Cuts

Third-quarter 2025 results showed $77.1 million in net income, up from $17.4 million the year before, but revenue slipped 4.6% to $821 million, undershooting estimates by $166 million. Gains came solely from slashing operating expenses by $60.6 million, not expansion. Hardware and accessories fell 12% year-over-year; software’s share shrank from 32% to 24% of sales. Collectibles—trading cards, figures, and merchandise—grew to 31.2% of sales from 19.9%, with a 54% jump to $211.5 million in the first quarter. Yet this cannot offset gaming declines, as hardware sales have consistently declined across multiple quarters, as overall revenue erodes.

Leadership Moves Fuel Debate

The board granted CEO Ryan Cohen a performance-based stock package potentially worth $35 billion, tied to boosting market cap from $9.3 billion to $100 billion and achieving $10 billion in cumulative EBITDA. Cohen forgoes salary or bonuses, earning only upon hitting these steep targets, which analysts deem unattainable amid revenue contraction. Separately, GameStop bought 4,710 Bitcoin for $512.6 million in May 2025, mirroring MicroStrategy, with holdings at $519.4 million by November. Critics say the funds, amid an 80% stock plunge from 2021 peaks, could have supported transformation or shareholder returns instead.

Market Outlook Remains Grim

Analysts project 42% downside, with a $13.50 consensus target from current $23 levels and “Reduce” or “Strong Sell” ratings. Forecasts see shares at $13.42 by late 2026, $9.36 in 2027, and possibly $1.88 by 2030, tracking physical retail’s fade. GameStop’s 2021 meme-stock surge from $17 to over $500 raised billions, building an $8.8 billion cash buffer for solvency. International retreats—from Germany, Austria, Switzerland, Ireland, Italy, Canada (sold May 2025), and planned French divestment—trim losses but shrink its footprint from 6,000 peak stores to about 3,200 by early 2025. Employees voice frustration over abrupt notices, even at viable sites, contrasting Cohen’s package amid layoffs.

These closures erase neighborhood gaming hubs for events and launches, hitting smaller and lower-income areas hardest, as part of 15,000 U.S. store shutdowns in 2025—double the prior year. GameStop’s path points to managed shrinkage into a niche collectibles player with 800-1,200 stores, modest profits, and depleting cash, its video game retail dominance a relic.