The headlines are really off on this, gamestop is profitable from a cash flow perspective but they had to write down stuff that used to be "intangibly" worth $x but is worth x/10 now. Whether thats used game value (our million copies of COD Ghosts used to be worth $40m but now its only worth $4m) or whether its companies they purchased like all the mobile game stuff, collectible stuff, etc. They also sold their Cricket partnership thing for $700m in cash so that offset a lot of those "we were dumb buyers of anything hot" streak they had going for a while.
In reality gamestop is fine from a strict $$ perspective but completely fucked as a public company since they basically aren't growing at all, in fact they project next year they will dip down 0-2% in revenue and probably more in profit. Thats fine if its your local ma & pa shop who just wanna pay salary, cover rent, and take home some money but not fine if you are a public company owned by shareholders.
They are pretty much close to being taken private by an equity firm, who will most likely just run the company down by slashing costs, loading the company up with tons of debt, and then shutting everything down when the debt gets too big. Same thing happened with Toys r Us. Its a 6-10 year cycle though so thats probably about how long Gamestop has.
There is some version of Gamestop that could grow and thrive but its probably never gonna happen. Their website is beyond ass, as we saw over the holiday periods the system losing orders, double billing, not updating, etc. Their inventory and pricing engines are terrible. Their real core strength, having 7k+ stores across the USA, is horribly mismanaged by having very weak IT to support people who want to impulse buy stuff and walk out with it within an hour. Sure, they could position themselves as the amazon of video games but they would have to literally rewrite the company from the ground up for that, and every year they get worse rather than better in speed and reliability.
