GameStop is a rapidly expanding corporation with 5,100 stores in 15 countries around the
It has a history of continual growth and is now an umbrella corporation for
GameStop.com, EB games, Game Informer Magazine, and Rhino Video Games.
Our group was
tasked with determining whether or not the decision to acquire Micromania, a French video
game retailer, was a wise decision, or if it would have been more sensible to open new stores
organically in France.
We concluded that GameStop made a smart decision when it acquired
this twenty-five year old French video game retailer.
Micromania is based in France, which has the second largest market for video games in
Europe, and is the leading video game retailer in France.
GameStop has stores all over Europe,
but have yet to infiltrate this valuable market.
According to Godinez, acquiring Micromania
would cost $700 million and would bring the number of GameStop locations to nearly 5,900, not
to mention the expected EPS would increase 25% or more.
This would produce increased
market share, avoid many entry barriers, aid in consumer awareness, increase speed to market,
and would involve less risk than expanding by opening stores from the ground up.
disadvantages of acquiring this firm included integration difficulties, difficulty in achieving
synergy, language barriers, and accounting/financial difficulties due to differing government
We decided that despite these disadvantages, it would be a more prudent decision to
GameStop is no novice when it comes to working on foreign markets, especially when it
comes to Europe.
It would be less difficult to continue expanding across Europe than to attempt
entering into a market where they currently have no market share like Asia, for example.
future, we suggested that GameStop might want to consider expanding their business model to
include services such as a rent-by-mail system, or acquire more domestic firms.