GameStop buying EB Games

[Ladic]

Former retail rivals to merge in $1.44 billion deal; new company will be biggest game-store chain in America.

With the launch of the PSP, the unveiling of all three next-generation platforms, and the almost assured launch of the next-gen Xbox, 2005 was already shaping up to be a wild year for the games industry. Today, it got even wilder when the two top specialty game retailers in the US revealed they will soon become one.

At the beginning of the East Coast business day, GameStop Corp. and Electronics Boutique Holdings Corp., owner of EB Games, announced they had signed a "definitive merger agreement." In fact, the deal will see GameStop, which saw $1.84 billion in sales during its last fiscal year, buy Electronics Boutique, which sold $1.98 billion sales during its 2005 fiscal year.

A joint statement sent out by both companies outlined the deal, under which GameStop will pay $38.15 in cash and 0.78795 shares of GameStop common stock for each Electronics Boutique share. The cash-stock combination is worth $55.18, 34.2 percent over EB's $41.12 closing price on Friday. EB's stock rocketed skyward on the news and was up over $14.50 as of press time. GameStop stock also rose on the news, gaining more than $3.10 in value.

Upon its closing, the agreement will see the two companies merge operations under the GameStop banner, which will then fly over 3,200 stores in the US and 600 others in Europe and Australasia. However, to not disrupt plans for the 2005 holiday season, no changes will be made in either company's organization until 2006. Then, in mall locations where there is duplication in retail outlets, store closings will follow "when appropriate," according to a GameStop official.

Though technically a takeover, the GameStop-EB merger met with glowing approval from both parties. "This transaction makes a tremendous amount of sense from an operational, cultural, and synergistic perspective," said EB CEO Jeffrey Griffiths. "We will now be in an even better position to broaden our reach and generate further efficiencies for our business and our customers." Griffiths' role in the new company was not identified.

GameStop chairman and chief executive officer R. Richard Fontaine also had good things to say about the deal, which isn't surprising, as he will retain this top slot after the merger. "We are merging these two companies from a position of strength," he said in a statement. Fontaine also confirmed that one motivation was GameStop's desire to expand outside its traditional North American market. "This merger ... will enable us to enter new international markets and allow us to compete more effectively in the highly competitive US video game industry."

The new GameStop will be well suited to fight off competition from rivals like Wal-Mart and Blockbuster Video's Game Rush subchain. According to Reuters, the post-merger company will be the biggest game retailer in the US, controlling some 25 percent of the market.

By Tor Thorsen -- GameSpot

POSTED: 04/18/05 11:13 AM PST

http://www.gamespot.com/news/2005/04/18/news_6122418.html

[yellowlightman]

Just heard about this on the news, although I honestly it doesnt seem like it's gonna be that big of a deal. The stores are so smiliar in very way I couldn't really care which one I'm shopping at, but it sucks for EB employees who might lose thier jobs. Although my local Electronics Boutique employs nothing but idiots who know nothing about video games save for the top PS2 games, so good riddance in that case.

I know there's employees of both companies on this forum, it'll be interesting to hear what they have to say about it.

[David Hingtgen]

Waiting for mikeszekely's comments.

I only have an EB near here, and a ex-SoftwareEtc-now-Gamestop 20 miles away.

I snag all my stuff from VideoGameDepot. Non-chain game stores rock. And I can buy Pocky there too

EB: buy XB game, get told how much XB sucks by the PS2 guy. Buy PS2 game, get told how much the PS2 sucks by the XB guy.

[JB0]

I've had better experiences at EB than GameStop, for what it's worth.

[haro genki]

Blah, as long as I can still get the games I'm looking for...

Though, there were a few times I saved some $$$ buying stuff from Gamestop rather than EB.

[yellowlightman]

EB: buy XB game, get told how much XB sucks by the PS2 guy. Buy PS2 game, get told how much the PS2 sucks by the XB guy.

That's my big beef with a lot of videogame shop employees, they're more than willing to dish out unwanted advice but when it comes to needing actual information about semi-obscure games it's hard to get anything our of them.

Recently went into my local EB a couple times looking for Daisenryaku and Phantom Dust, but new Xbox releases and the employees hadn't heard about either of them. Is it so hard to look at release dates to keep up to date on upcoming games? When I worked at a car dealership I had to do a lot fo reading about the cars I was selling; is it so hard to expect an individual in a service job to be informed about the product they're selling?

[Britai 7018]

Yeah this is gonna be fun. I doubt many EBs will close, mostly in mall stores (or strip malls) where both chains have establishments. We have similar business practices (pushing preplayed products, membership cards, trading in games, etc.) And many many people think that we're the same company already anyway. So the adjustment at the store level will be fairly smooth.

As far as employees go, you're going to get your full spectrum of types. I mean when you have thousands of stores across the world, its going to be hard to say that EB/GS employees are like this or like that. Its definitely not written in the training log to favor a console and hate on another. Obviously your better employees will know their games and give you good info.

My work (EB) probably has the 5 least gamer employees in the entire chain. 80% of the time when asked about a game, we'll spout exactly what info we get through customer feedback, magazine reviews and online reviews. There is no magical source of insider information that we get that gamers can't get access to. The only reason we might know something more is because we are constantly exposed to games.

[CoryHolmes]

is it so hard to expect an individual in a service job to be informed about the product they're selling?

Apparently, yes.

[JB0]

Blah, as long as I can still get the games I'm looking for...

Though, there were a few times I saved some $$$ buying stuff from Gamestop rather than EB.

Depends, really.

GameStop tends to price REALLY absurdly on the used games. As in I've seen them asking the EXACT SAME price for new and used.

[sabretooth]

example tales of symphonia new 49.99 used 44.99

huge savings there, just massive

[mikeszekely]

example tales of symphonia new 49.99 used 44.99

huge savings there, just massive mad.gif

Figure that they only do that so that you buy the damn discount card. 10% off is almost another $5, and a $10 difference is suddenly more appealing. What's more, coupons are often run in those magazines you get with the discount card, for 10% more off.

Also, they need to still be able to make money when they run the buy 2 get one free deals.

GameStop tends to price REALLY absurdly on the used games.  As in I've seen them asking the EXACT SAME price for new and used.

Examples? It's been my experience, as both an employee and a customer, that both stores average about $5 less than the new for games between $24.99 and $45.99, and $17.99 for a game that'd be $19.99 used. In the long run, Gamestop tends to drop prices faster, EB tends to drop them lower and toss them in that bin that looks like they're trying to do clearance. Besides, last time I checked (which admittedly was a few months ago), you couldn't find a copy of Marvel vs. Capcom 2 at Gamestop to save your life, but if you did it would be $29.99. EB had plenty... because they wanted $59.99 for it.

Waiting for mikeszekely's comments. smile.gif

Ask and ye shall recieve.

Well, I actually have seriously mixed feelings about the whole thing.

On the one hand, if I had any sort of company loyalty, I'd suppose it's a good thing for us that we own our most direct competition. Plus, like the article stated, it'll put us closer to Wal-Mart it terms of competition. Besides, if the EBs in your areas are anything like the ones in mine, they're cramped, disorganized stores staffed by people who actually know litte about games. Oh, and since there are a lot of EBs in malls where there aren't Gamestops (it seems like we prefer strip malls, lately), a lot of the EBs should be able to change over to Gamestops and the employees can keep there jobs. For the ones that can't, I feel for them, but they have at least a year to find something else (more on that later).

On the other hand, though, I think anytime consumers have fewer choices, the consumers lose. I mean, even after I started working at Gamestop, I still shopped occasionally at EB to hunt for a good bargain, a game we didn't have, or for stuff we don't carry, like Dreamcast games. Also, Gamestop has had some real problems with our district, regional, and corporate managers lately. (Sick of having Gamestop salespeople pitch reservation, subscription/discount deals, etc at you? Blame the district managers, not the store clerks. Believe me, we don't want to push that poo on you guys, but we do want to keep our jobs. And before you ask, yes, we really can get fired for not selling you that crap... our dm wants us to can one of our assistant manager over it, but I don't think we're going to.) See, I worked at Ames for four years. When Ames bought out Hills, that's when the poo hit the fan. With all the other problems Gamestop has, I'm afraid that they're actually just going to take EB down with them. Then where will I go to get games? Target?

Well, I did talk to my manager about all this, and although everything should go through okay, the deal isn't actually finalized until August. Before then, other companies have a chance to outbid Gamestop while the buyout has to be approved by shareholders on bothsides, plus some anti-trust group. From August until sometime in 2006, we'll own EB, but the EB stores will still remain basically the same while the company does their research and figures out which stores to change to Gamestops, which EBs to close, and which Gamestops close because the EB location was better. All-in-all, it'll be around a year before all the dust settles.

[Jemstone]

This is a complete nightmare!!! mikeszekely might be happy but for thos eof us which cannot stand Gamestop and have EB as our primary game source.... this is a punishment worse than the deaths of SNK and Sega combined! Again, this is something based purely on experience and it's most likely varies from store to store.

Funcoland/Gamestop has always been horrible and unresaonable with prices where thinsg were always better at EB. This also went for all my friends who worked at FL/GS over the last 11 years ont he east coast from Boston, MA to ATlanta, GA. To the poitn a couple actually robbed their GS blind in PA cuz of how bad the store's practices are.

So for some of us who don't have the most fortunate experiences like some here... this is a total nightmare!

[Hurin]

This is a complete nightmare!!! mikeszekely might be happy but for thos eof us which cannot stand Gamestop and have EB as our primary game source.... this is a punishment worse than the deaths of SNK and Sega combined! Again, this is something based purely on experience and it's most likely varies from store to store.

Funcoland/Gamestop has always been horrible and unresaonable with prices where thinsg were always better at EB. This also went for all my friends who worked at FL/GS over the last 11 years ont he east coast from Boston, MA to ATlanta, GA.  To the poitn a couple actually robbed their GS blind in PA cuz of how bad the store's practices are.

So for some of us who don't have the most fortunate experiences like some here... this is a total nightmare!

That seems a bit. . . dramatic?

They are game stores. You can order games online, rent them at Blockbuster, or suffer a little annoyance (or $5 in increased prices).

But, "nightmare?"

Though, it is nice to know that theft is alright as long as the company has bad practices.

For my own situation, it doesn't really matter at all to me since I'm a PC Gamer and both EBX and GStop have been giving PC games the shaft for a while now.

Either way, I can only see this as being a "nightmare" if you (or a loved one) are one of those "career/management" EBX employees. Those who worked there as their after school job will get by.

H

Edited April 19, 2005 by Hurin

[Abombz!!]

Honestly? I can't even tell the difference between the 2 anymore. Both EB and Gamestop near where I live are basically the same store, and they both don't follow the apparent "rules" of a normal EB and gamestop stores. No one trying to shove games in my face, no misinformation, no nothing. Surprisingly enough, both stores seem to have mostly girls running the registers.

That being said, I usually go to Gamestop first, this particular store has a much neater set up then EB. EB has this huge wall for PC games, but everything else seems to be hidden in the middle of strategy guides, toys, and poo I usually avoid. Not only that, but they seem to be real slackers with dealing with new shipments. As for Gamestop, they have a nice PC lineup, used and old games, and equal size shelves for all 3 consoles. I haven't had any problems finding rare games at all.

So to this merger... I *shrug*

Edited April 19, 2005 by Abombz!!

[Jemstone]

Yes, Hurin, a nightmare but then that's because the local EB is one of my "hang out" spots (really more like a goodbye place for the guys before they ship them off to Iraq but still a hang out spot). Part of this was because of the great service this EB is which I know will undoubtedly change once it's Gamestop and prices go up some. The new management will change things and the very fact I HATE Gamestop as a corporationa nd always hoped things would have gone vice versa does make it all a nightmare scenerio.

Still, to repeat myself, it depends on someone's own experiences with the chain. I don't know what the chains are like out west but on the east coast GS sucks hard in terms of pricing, retail value and service compared to EB. (what kind of retail management opens up a $200 Cowboy Bebop limited Edition DVD boxt set only to LOSE the CD soundtrack that came with it and thus trashing the entire set?)

I never said theft was alright but it was a hilarious theft regardless.

Edited April 19, 2005 by Jemstone

[Godzilla]

Blah, as long as I can still get the games I'm looking for...

Though, there were a few times I saved some $$$ buying stuff from Gamestop rather than EB. 

Depends, really.

GameStop tends to price REALLY absurdly on the used games. As in I've seen them asking the EXACT SAME price for new and used.

Oh god yes. Their used game prices really annoyed the hell out of me.

[mikeszekely]

Funcoland/Gamestop has always been horrible and unresaonable with prices where thinsg were always better at EB.

See, this is the one thing I don't get, and I'm sure Britai would agree with me on this point (I know that the guys at the EB upstairs do). We both have, at both of our stores, people the come in and tell us how great our store is and how much better our prices are and how they can't stand the other... but I'm really serious when I say this: aside from a few older or obscure games (who cares if EB sell Star Wars: Starfighter Special Edition for the Xbox for $9.99 and Gamestop sells it for $12.99?), our prices are THE SAME.

[jardann]

Meh... These stores both pretty much suck in my area. Although the EB near where I work has a pretty cute and nice girl behind the counter. It's a good place to kill a few minutes on a break. If I ever go into these stores I just look for a really good bargain. For the most part their prices (either chain) are no cheaper than other sources and their trade in policies kill me.

Anyone who trades in a game system with five games in order to get $20-$30 off of another game system with no more games is just a moron in my opinion. I can't believe that people let themselves get screwed like that. I'd rather hold onto an old game if someone's only going to give me $5 trade in on something I paid $40 for. And that they're going to turn around and sell for $30.

I realize this is just my opinion and there is something nice about a store that specializes in video games if that is what you are into. Seeing as these chains are near clones anyway I don't think that there will be a big impact on consumers. I do feel for anyone who may lose their job though. That is never fun even if it's just a part time gig.

Edited April 19, 2005 by jardann

[Jemstone]

Funcoland/Gamestop has always been horrible and unresaonable with prices where thinsg were always better at EB.

See, this is the one thing I don't get, and I'm sure Britai would agree with me on this point (I know that the guys at the EB upstairs do). We both have, at both of our stores, people the come in and tell us how great our store is and how much better our prices are and how they can't stand the other... but I'm really serious when I say this: aside from a few older or obscure games (who cares if EB sell Star Wars: Starfighter Special Edition for the Xbox for $9.99 and Gamestop sells it for $12.99?), our prices are THE SAME.

Then are you sure it's not a regional thing? I swear to you as an avid shopper and price comparison person I have consistently found EB prices generally cheaper. In some cases it would be the same but usually by a couple dollars cheaper.

There's still a difference to me from $49.99 to $52.99.

[ewilen]

There's a game store down the corner which I pass every day on my way to/from work; I've even bought a game or two there, but I couldn't tell you if it's EB or Gamestop.

At first this seemed to me like another outrageous example of monopoly-building (such as the Adobe-Macromedia deal), but then I have to ask--what kind of service do these stores provide, anyway? (No offense to mikeszekeley.) I don't buy that many games, and the ones I've bought have mostly been through online sources. What's the advantage of buying at a specialty store as opposed to Target, Fry's, CompUSA, etc.?

[Ladic]

There's a game store down the corner which I pass every day on my way to/from work; I've even bought a game or two there, but I couldn't tell you if it's EB or Gamestop.

At first this seemed to me like another outrageous example of monopoly-building (such as the Adobe-Macromedia deal), but then I have to ask--what kind of service do these stores provide, anyway? (No offense to mikeszekeley.) I don't buy that many games, and the ones I've bought have mostly been through online sources. What's the advantage of buying at a specialty store as opposed to Target, Fry's, CompUSA, etc.?

used games

[JB0]

GameStop tends to price REALLY absurdly on the used games. As in I've seen them asking the EXACT SAME price for new and used.

Examples? It's been my experience, as both an employee and a customer, that both stores average about $5 less than the new for games between $24.99 and $45.99, and $17.99 for a game that'd be $19.99 used. In the long run, Gamestop tends to drop prices faster, EB tends to drop them lower and toss them in that bin that looks like they're trying to do clearance. Besides, last time I checked (which admittedly was a few months ago), you couldn't find a copy of Marvel vs. Capcom 2 at Gamestop to save your life, but if you did it would be $29.99. EB had plenty... because they wanted $59.99 for it.

I don't honestly recall which title it was.

It may just have to do with the games I look at, but in my experience the EB games get cheaper faster.

[JB0]

This is a complete nightmare!!! mikeszekely might be happy but for thos eof us which cannot stand Gamestop and have EB as our primary game source.... this is a punishment worse than the deaths of SNK and Sega combined! Again, this is something based purely on experience and it's most likely varies from store to store.

Funcoland/Gamestop has always been horrible and unresaonable with prices where thinsg were always better at EB. This also went for all my friends who worked at FL/GS over the last 11 years ont he east coast from Boston, MA to ATlanta, GA. To the poitn a couple actually robbed their GS blind in PA cuz of how bad the store's practices are.

So for some of us who don't have the most fortunate experiences like some here... this is a total nightmare!

Hey now! Funcoland was a damn fine establishment originally.

Let you test games before you bought them, bought back old games, and sold out-of-print stuff. And as far as I know, they were the first to do so, though EB did add these features to their stores later.

Now both of them don't let you test games out, try not to carry products for dead systems, and ... well, they buy back games, but for absurdly small amounts of cash/credit.

[ewilen]

What's the advantage of buying at a specialty store as opposed to Target, Fry's, CompUSA, etc.?

used games

Okay, that's a good point. I did get Battlecry from that store when I was in a hurry and couldn't go the online route. For my other used (and new) games, though, I've bought online via eBay and other sources. Perhaps the "plugged-in" nature of the video game audience helps to account for the relative dearth of brick & mortar independents who deal in used games, compared to used book & record stores.

[ewilen]

Okay, checking up on what I wrote, I found that there are really a fair number of lesser-known game shops/chains, at least in my area. Around here, for example, there's a place called Game Crazy, and I wouldn't be surprised to see them take over some of the EB Games locations, if Gamestop fails to convert all them into Gamestops.

Of course, they could then become fodder for Gamestop later on...

http://yp.yahoo.com and http://www.google.com/lochp?hl=en&tab=wl&q= are two places I looked.

[Britai 7018]

The primary competition for Gamestop/EB (obviously used to be one another) is not so much the WalMarts or Bestbuys of the world, its mostly the Gamecrazys and other smaller specialty stores that sell video games. I mean the big megastores are of course selling the same product, but this merger is not going to make a big difference to the consumer in terms of where they decide to buy video games. Of course from a corporate standpoint is adds a tremendous amount of assets and value.

What smaller specialty stores offer is a much better selection, better trained staff, more of the niche games and products as well as a more customer-oriented environment. Of course you can complain about the service you get, from bad experiences, but I'd say 9/10 times that anytime I goto a small store, I get better service or easier access to an employee than at a Bestbuy or other Megastore. I suppose one personal example, is that at my store, we keep a percentage of our stock of Final Fantasy or other fanboy favs completely unstickered and keep them in mint condition, because we know that there are collectors out there.

And its like I said earlier, don't judge an entire chain by one store. There are EB's that I find horrible (customer service/organization), and there are Gamestops that I also dislike for the same reasons. It really depends on each store. The chain doesn't set the rules to keep the store messy or disorganized, its the employees who are responsible for keeping an organized workplace.

As far as pricing goes, I think its decent across both chains. Their prices are generally very close, if you discount special sales or promotions. I think I've probably found better deals at EB, but thats possibly because working there constantly exposes me to different sales and whatnot.

Edited April 20, 2005 by Britai 7018

[Akilae]

used games

yeah, that... also being able to find some more esoteric games like Ring of Red.

What I REALLY miss is the ability to trade in or buy used PC games... got my copy of Baldur's Gate II at half price within the first two weeks of launch, cause it was missing the box.

[mikeszekely]

Funcoland/Gamestop has always been horrible and unresaonable with prices where thinsg were always better at EB.

See, this is the one thing I don't get, and I'm sure Britai would agree with me on this point (I know that the guys at the EB upstairs do). We both have, at both of our stores, people the come in and tell us how great our store is and how much better our prices are and how they can't stand the other... but I'm really serious when I say this: aside from a few older or obscure games (who cares if EB sell Star Wars: Starfighter Special Edition for the Xbox for $9.99 and Gamestop sells it for $12.99?), our prices are THE SAME.

Then are you sure it's not a regional thing? I swear to you as an avid shopper and price comparison person I have consistently found EB prices generally cheaper. In some cases it would be the same but usually by a couple dollars cheaper.

There's still a difference to me from $49.99 to $52.99.

It's possibel that it could be a region thing, and if that's the case, I'm sorry that the Gamestop in your area is hell-bent on ripping people off. But I swear to you, as an avid videogame shopper, I've never seen a game with a retail price of $52.99 outside of collectors or special editions, save EB's used Marvel vs. Capcom 2, which was going for 54.99-59.99. Locally, as I've mentioned, we'll usually drop a price first (for example, Metal Gear Solid 3 dropped to $39.99), and once you start going into the bargain basement stuff, it's really a toss up, since we both run games from $6.99-$12.99 in that catagory, but not necessarily the same ones.

[mikeszekely]

There's a game store down the corner which I pass every day on my way to/from work; I've even bought a game or two there, but I couldn't tell you if it's EB or Gamestop.

At first this seemed to me like another outrageous example of monopoly-building (such as the Adobe-Macromedia deal), but then I have to ask--what kind of service do these stores provide, anyway? (No offense to mikeszekeley.) I don't buy that many games, and the ones I've bought have mostly been through online sources. What's the advantage of buying at a specialty store as opposed to Target, Fry's, CompUSA, etc.?

used games

Selection. Stores like Target and Wal-Mart maintain what's current.

I like to buy games at Target sometimes, when they run good sales (I got Xenosaga II the day it came out for $37.77). But ever since I was little, I've bought most of my games at EB or Gamestop/Funcoland/Babbage's.

[Druna Skass]

Eh? The next xbox is comming out in 2005?

[Skull Leader]

bah, I hope they fire the ass-tards that are working the EB back in my hometown. All they were was a bunch of FFVII-worshipping, non-sex-lifed, living-in-their-mother's-basement teenagers whom I wouldn't snuff for a cup of coffee if I was a hired killer. I picked up my first ever copy of Metal Gear Solid from there and the prepubescent mutant at the counter asked me why I was wasting my time with that and not playing FFVII?

My reply?

"If I wanted your advice, I'd ask your mother. Now STFU and ring the g-damned register."

.... now the guys at the new Gamestop that came in about 3 years ago were pretty cool. One of my best friends went to work there and was always getting stuff for me with his employee discount. The manager that runs the store has a hardline policy against hiring freaks who don't know well enough to keep their mouths shut in the presence of superior beings.

Edited April 20, 2005 by Skull Leader