Image Credit: GameStop

From Games to Collectibles – What’s Changing

Over the past year, GameStop has quietly but decisively reshaped its core identity. Once famed for selling video games, it’s now leaning into trading cards and collectibles, especially Pokémon. CEO Ryan Cohen describes it as a “natural extension” of the business: trading cards carry higher profit margins, the grading service is thriving, and Pokémon sets like Destined Rivals, released May 30, have been selling out fast. In Q1 2025, collectibles sales shot up 54% to $211.5 M, a powerful signal the new strategy is working.

Cost Cuts, Closures & Leaner Operations

With physical game sales collapsing, Q1 game software and hardware revenue dropped ~32%, GameStop executed a major downsizing: closing nearly 600 U.S. stores in 2024, shuttering another 400+ in early 2025, and selling or winding down operations in Canada and Europe. As a result, the company swung back to profitability in Q1 2025, reporting $44.8 M net income vs. a $32.3 M loss last year. Profitability was powered in part by its collectibles and graded card services, alongside improved online revenues.

Bitcoin in the Balance Sheet: A Crypto Pivot

That wasn’t the only pivot. In March 2025, the board approved Bitcoin as a treasury asset, and GameStop wasted no time buying it – 4,710 BTC between May 3 and June 10, worth around $450–$500 M. Then, in mid June they announced a $1.75 B convertible note sale with a $250 M upsell option, widely interpreted as a means to bankroll further Bitcoin accumulation. Following that, shares dropped ~20% on concerns over dilution and crypto volatility.

Market Reaction: Investors Wary, Skeptics Vocal

The market’s response has been swift. Stock dropped ~21% in one week amid the convertible note offering and Q1 earnings that missed revenue expectations $732 M vs. $750 M projected. Critics argue pivoting to Bitcoin exposes GameStop to excessive volatility and questions the wisdom of moving further from its roots. The stock is flirting with its lowest closes since April, leaving long term investors uneasy.

What Ryan Cohen Thinks

Cohen frames this as a smart financial pivot – cutting costs aggressively, refocusing on profit drivers, and hedging macro risk with Bitcoin. In a Reddit AMA he said GameStop was “a piece of crap” under prior leadership; now, it’s “profitable in the U.S.”, reminders not to follow the company blindly, and that Bitcoin is a “digital gold” hedge. The Reddit thread also suggests BTC purchases happened at $75–80K per coin, which would imply unrealized gains of ~$100–150 M.

The Takeaway

• Core business still facing long term pressures from digital distribution but collectibles are a bright spot, bridging the gap
• Crypto for treasury: bold but high risk. Bitcoin’s roller coaster valuation isn’t everyone’s cup of tea
• Balance sheet strengths: Nearly $6.4 B in cash reserves, heavily bolstered by marketable securities and crypto holdings, offset by increasing debt from note issuance
• Market trust hangs in the balance: If Cohen’s gamble on crypto and collectibles pays off, GameStop could reemerge as a curious and profitable modern retail hybrid. If not, investors could sour quickly

Final Thoughts

GameStop’s pivot isn’t “going away from games” merely, it’s a reinvention. The chain is shedding its old model, doubling down on collectibles, and embracing macro hedging via Bitcoin. Whether this becomes a masterstroke or misstep depends on execution, crypto’s performance, and whether physical lovers of gaming continue to be part of the story. Worth keeping a close watch.

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