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Don’t be surprised if your local GameStop tries to sell you trading cards instead of video games.
At its annual stockholders meeting this week, GameStop CEO Ryan Cohen said he’s betting the company’s future on physical trading cards from franchises like Pokémon and Magic: The Gathering. "We are focusing on trading cards as a natural extension of our existing business, [which is] aligned with our heritage.”
For decades, GameStop has been known for selling video games. However, the US retailer has struggled to generate profits amid the growing popularity of digital video games. In Q1, the company’s revenue fell by about 17% year-over-year to $732 million.
Although GameStop has long relied on used video games to prop up its sales, Cohen said physical trading cards can be another high-margin business. “It fits our trade-in model, it appeals to our core customer base, and it is deeply embedded in physical retail,” he added. "Unlike software, it's tactile. Unlike hardware, it has high margin potential. It's a logical expansion.”
GameStop’s website has already been focusing on the trading card push, featuring the sales at the top of the homepage and as the first category, relegating Nintendo’s recently launched Switch 2 console further down. The sight may be a strange sight to behold for gamers. But the most valuable single cards for Pokémon or Magic: The Gathering on GameStop's site can fetch for between $200 to $800, far more than an average video game.
In addition to the trading card focus, GameStop is also investing in cryptocurrency as it tries to find a more viable business model. Last month, the company bought about $500 million in bitcoin. The retailer has also been shutting down more stores to cut costs.