GameStop entered the New York Stock Exchange on 13 February 2002, raising a whopping $325 million. Shares finished the day at approximately $20.10, around 12 per cent above the level analysts had predicted before the company was spun out.
The timing reflected a rapidly expanding market. Sales of video games and consoles hit $9.4 billion last year in 2001, almost 30 per cent higher than they had been just a few years earlier. For more coverage of the business behind gaming, visit RETROCADE’s arcade industry news and features.
Barnes & Noble builds a games empire
Book retailer Barnes & Noble had spent the previous few years strengthening its position in video-game retail as consumer interest in games continued to grow. Its expansion began with the $215 million purchase of Babbage’s Etc in 1999, followed by the $160 million acquisition of FuncoLand in 2000.
The FuncoLand deal also brought the Game Informer magazine into the group. Babbage’s Etc and FuncoLand were subsequently placed under the GameStop name, supported by a substantial presence in shopping malls and an online store. Barnes & Noble remained the majority shareholder in the newly listed company, which ended its first day with a total valuation of $972 million.
Competition was already intense
GameStop’s public debut did not remove the pressure from rival retailers. Toys “R” Us used Amazon to sell its games online, while Blockbuster offered new releases as short-term rentals at considerably lower prices.
Industry observers expected 2002 to become gaming’s biggest year to date. A new console generation was bringing dedicated players back into shops in search of the latest releases, while retailers competed across physical stores, websites and rental services.
Analyst David Menlow of IPOfinancial.com wrote that investors were entering a PC entertainment software market that still appeared to have room to grow. He also noted that the offering gave Barnes & Noble a major financial benefit while raising $325 million for the company.
Predictions for an online future
Activision chief executive Bobby Kotick described 2002 as a year centred on software. He pointed to games connected with the Spider-Man, Star Wars and Minority Report films, while naming Kelly Slater Surfing as his personal favourite.
Kotick also expected the internet to become increasingly important to gaming. Looking ahead to 2005, he predicted that the next PlayStation, Xbox and GameCube-era systems would include integrated broadband, enabling players to download games and compete with others online.
His more ambitious vision included paid tournaments, where players might contribute $10 to enter an event with a $100,000 prize pool. The idea of rewarding players directly for their performance was presented as one of the most exciting possibilities created by connected consoles.
At the time, even more speculative futures were imaginable: by the arrival of the PlayStation 4, players might wear headsets and play games created by friends in cyberspace. In the nearer term, the immediate retail battleground was the midnight launch, with Grand Theft Auto: Vice City identified as a major release available through those events.
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