GameStop Embraces Bitcoin Amidst Strategic Store Closures

GameStop Embraces Bitcoin Amidst Strategic Store Closures

Source: REUTERS/Andrew Kelly

In a move that is both radical and a reflection of its embrace of the changing digital era, GameStop has announced that it would add Bitcoin as a treasury reserve asset. This action follows other companies that are seeking to incorporate cryptocurrency as part of their financial strategy. ​

GameStop’s move follows the strategy of other large companies, including Strategy, which just changed its name to reflect its commitment to cryptocurrency. This corporate trend indicates increased acceptance of virtual currencies as legitimate assets.

The action by GameStop follows an executive order signed by President Donald Trump last month, seeking to create a strategic reserve of cryptocurrencies through the use of existing government-held tokens. The move by the government has probably guided business decisions to invest in virtual currencies.

Although reporting a substantial increase in fourth-quarter net income to $131.3 million, from $63.1 million last year, GameStop is still struggling in its core business. The transition to digital downloads, game streaming, and e-commerce has caused a decrease in traditional retail sales. Fourth-quarter revenue dropped to $1.28 billion from $1.79 billion last year.

In order to address these challenges, GameStop has aggressively reduced costs by closing physical stores. It closed 590 stores in the U.S. in the fiscal 2024 year organizationally and expects to close a substantial portion of other stores in the fiscal 2025 year. The purpose of this undertaking is to reconfigure and adapt to the new realities of the retail format.

GameStop’s move to use Bitcoin as a treasury reserve asset marks a tactical shift towards embracing digital assets in the face of continuing operational challenges. By joining other industry trends and reacting to government actions, the company hopes to gain an advantageous position in the new finance landscape. Its success, however, will hinge on the unpredictable nature of cryptocurrencies and the ability of the company to keep up with the constantly shifting retail landscape.​