GameStop Buys ThinkGeek Parent Company Geeknet

GameStop Buys ThinkGeek Parent Company Geeknet

GameStop is purchasing ThinkGeek parent Geeknet for $140 million.

GameStop, in recent years, has been making attempts to diversify its brands and products to help lift profits hit hard by changes in the way that games are purchased and sold. Now, in addition to a new focus on mobile products and efforts to try opening up its vast stock of retro titles, it's been announced that the gaming chain is buying nerd-ware seller ThinkGeek along with its parent company Geeknet.

According to an announcement released by GeekNet this morning, GameStop has purchased the company in a deal that will see the retail chain acquire it and its properties for "approximately $140 million," including "$37 million of cash and cash equivalents." The purchase will leave GameStop in possession of "all of the outstanding shares of Geeknet's common stock" which are valued at $20 a share. GameStop CEO Paul Raines, in a statement, stated that the acquisition will enhance the value of everyone involved. "The addition of Geeknet is an important expansion of our global multichannel platform," he said. "We are excited to leverage their product development expertise to broaden our product offering in the fast-growing collectibles category and deepen relationships with our existing customer base."`

This purchase, of course, cancels another in-process deal that would have seen mall fixture Hot Topic purchasing Geeknet and ThinkGeek for $122 million. GameStop has agreed to reimburse Geeknet for the termination fee that resulted from the company accepting its "superior" offer.

What remains to be seen is exactly what GameStop will do with Geeknet and ThinkGeek. In the announcement, it was indicated that GameStop and Geeknet would be working together to maximize profits, share licenses and expand the benefits affored to members of programs such as GameStop's PowerUp Rewards. Speaking personally, I think it would be neat if we could start seeing some of ThinkGeek's products showing up in GameStop's retail locations. If nothing else, it could a long way toward helping GameStop continue its drive to transform its stores into more than just a place to bring your used copies of last year's Madden title.

What do you think of this deal and what would you like to see come out of it going forward?

Source: Geeknet

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well it was nice while it lasted.

I used to buy quite a bit from Thinkgeek, everyone in the office would get in on an order. Though a couple of years ago we just stopped, the site went for novel to kitschy. I found out later that they went through a major management change and the work environment there went downhill which would explain a lot.

In any event, the fact it's been bought out by Gamestop only sends more red flags to stay as far away from this site as possible. I don't imagine them improving conditions for employees.

Managed to find a reference
http://programming.com/social/posts/4096106173789374274

Excellent, now I can buy used unicorn meat at just 95% the price of a new can and trade it back for about $2. /sarcasm

It doesn't surprise me that GS would jump at something like this. They're under threat of virtually every PC sales platform and all of the consoles having built in market places. Those aren't really hurting them as much as they would like us to think right now, but thing could change in a few years. It was smart for them to latch on to a retailer that specializes in physical stuff.

Hmm, I dunno. It sounds like a solid business decision, but on the other hand it will cause massive damage to ThinkGeek's "For geeks by geeks" appeal.

Ya know I don't like GameStop. They are "part of the problem" with the games industry. But that being said if they want to remain relevant they need to move to digital distribution. If they can make a storefront that rivals XBL PSN and Steam they will continue to stay in business long after Physical goods get phased out.

That being said I'm sad they are taking over think geek. I imagine it will proceed like most EA buyouts go. GameStop lets them do their thing for a bit, then starts pushing more and more of their BS on them until they fail and GameStop discards their carcass.

Oh well we still have Fangamer.

How are they even still in business is what im curious about, there pricing is ridiculous, a quick look on the store and i am met with

$40 for a bowtie - $300 for a coat - $65 for a tie - $80 for a clock i mean dam is this stuff worn by famous people first or something.

Eric the Orange:
Ya know I don't like GameStop. They are "part of the problem" with the games industry. But that being said if they want to remain relevant they need to move to digital distribution. If they can make a storefront that rivals XBL PSN and Steam they will continue to stay in business long after Physical goods get phased out.

That being said I'm sad they are taking over think geek. I imagine it will proceed like most EA buyouts go. GameStop lets them do their thing for a bit, then starts pushing more and more of their BS on them until they fail and GameStop discards their carcass.

Oh well we still have Fangamer.

Do you not realize that they bought out StarDock's platform a few years ago? They tried fighting Steam/Origin/PSN and it went nowhere. They just latched the platform onto their horribly managed website and ...nothing. It's utter dribble.

I don't know how to feel about this. On one hand, at least they weren't bought out by Hot Topic. On the other, they were bought out by GameStop.

Deathfish15:

Eric the Orange:
Ya know I don't like GameStop. They are "part of the problem" with the games industry. But that being said if they want to remain relevant they need to move to digital distribution. If they can make a storefront that rivals XBL PSN and Steam they will continue to stay in business long after Physical goods get phased out.

That being said I'm sad they are taking over think geek. I imagine it will proceed like most EA buyouts go. GameStop lets them do their thing for a bit, then starts pushing more and more of their BS on them until they fail and GameStop discards their carcass.

Oh well we still have Fangamer.

Do you not realize that they bought out StarDock's platform a few years ago? They tried fighting Steam/Origin/PSN and it went nowhere. They just latched the platform onto their horribly managed website and ...nothing. It's utter dribble.

Point still stands that if they want to be successful selling video games they need an online service that can compete. The Idea isn't bad but rather their execution of it.

Ultimately, I'm sure this means that you'll see more of the merchandise you'd usually see on ThinkGeek available in physical locations. I don't think that's a bad thing, not altogether, but I'm just hoping that GameStop will let them do business as usual while stocking their goods. That'd be the ideal, but of course where GameStop is concerned, the ideal is not always that we get. Not that I'm one of those people that thinks of GameStop as the devil incarnate, but I recognize that they have shitty business tactics.

I already found alternatives to Thinkgeek because I sure as hell am not buying from TG now so I don't partly support Gamestop.

Considering how ThinkGeek's inventory went from awesome toys to lame trinkets that milk recent popular franchises I can't say we are losing anything important. ThinkGeek sort of died a few years ago when it's inventory was replaced with these lame trinkets meant to appeal to the broader audience.

Ok, so let me break this down for all the non-Australians.

Gamestop is the parent company of EB Games Australia (Australia's largest, and only speciality, games retailer). EB Games made record profits last year, and have been smashing sales budgets/expectations for the last few years.

They put this down to an expansion into 'loot', loot is now one of the largest sections in EB games stores, this includes plushies, collectables, figures, statues, board games, Pop vinyls etc. A huge majority of which already comes directly from Thinkgeek, a lot of the stock still has Thinkgeek tags on it, things like Portal socks, the U.S.S enterprise pizza cutter etc.

Now 2 years ago EB Games Australia launched their first Zing store, an entire store that is just loot, obviously on a much larger scale than the sections inside the EB Games stores, there are now 11 Zing stores in Australia and they are apparently so hugely popular and profitable that Gamestop recently gave EB Games Australia a ridiculous amount of money (in the ten's of millions) to open more Zing stores - I believe there are 120 more Zing locations already loosely planned; the 12th store opens in a few days in Melbourne.

Considering this massive expansion, and the fact that EB Games already gets a huge amount of stock from Thinkgeek, I believe this acquisition is to lower costs associated with this new found 'partnership'. It may even mean that Gamestop will begin opening something akin to Zing stores in the US.

I don't think it will really affect thinkgeek much at all, this is probably more a behind the scenes thing to increase production of thinkgeek merchandise and to lower the costs involved with selling their products in specialty stores (whether or not that remains an Australian only thing or if Gamestop plans to open their own).

At first I was sad that Gamestop is taking over Thinkgeek. But then I realized that I haven't bought anything from Thinkgeek in a long while. I guess my reaction now is 'oh well'.

I think if you want to get anything on ThinkGeek related to emulation gaming, your doomsday clock just started.

I don't have the kind of unvarnished hatred for Gamestop that some people feel, but the idea of seeing a neat site like ThinkGeek have its inventory narrowed of most of its more unusual offerings and become home for cross-promotions and similarly cynical business practices- which seems the likely outcome- can't help but make me a little sad.

 

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