GameStop Announces Multi-year Strategic Partnership with Microsoft

The partnership aims to Advance GameStop’s Key Strategic Pillars and Extend its Digital Omni-Channel Ecosystem

GameStop Corp. (NYSE: GME) (“The Company”) today announced that it has entered into a multi-year strategic partnership agreement with Microsoft Corp., further advancing its strategy to expand its physical and digital video game offerings, as well as enhance the Company’s retail technology infrastructure. With over 5,000+ retail stores worldwide and its world-class eCommerce platform, GameStop leverages its vast customer network, PowerUp Rewards, and omni-channel capabilities to deliver enhanced gaming solutions to its customers. Through this partnership, GameStop will standardize the Company’s business operations on Microsoft’s cloud solutions and hardware products to deliver rich new digital experiences to customers, creating the “ultimate gaming destination” for gamers in its vision to be the premier omni-channel customer access point for video game products.

The partnership includes enterprise and commercial elements.

  • Under this agreement, GameStop will standardize its back-end and in-store solutions on Dynamics 365, Microsoft’s portfolio of cloud-based business applications and customer data platform, empowering associates with integrated experiences across its business operations including finance, inventory, eCommerce, retail and point of sale. This will enable store associates the ability to access omni-channel insights about customer preferences and purchasing history, real time information on product availability, subscriptions, pricing, and promotions in order to provide a differentiated and personalized in-store customer experience.
  • Additionally, associates will be equipped with new Microsoft Surface devices that will transform the in-store experience and help unlock new retail experiences in the future. The mobility of Microsoft Surface will allow associates to move freely within the store footprint, meeting the needs of customers faster and more efficiently. Microsoft Surface devices have already been an important part of the digital modernization strategy for store management.
  • As part of its transformation, GameStop plans to roll out Microsoft 365 and Microsoft Teams to its stores, empowering more than 30,000 store associates with enhanced productivity and collaboration tools. With Teams, store associates will more easily be able to ask questions and share insights with one another, enabling them to provide a better customer experience. Associates will also benefit from enhanced security and identify management capabilities.  
  • Following decades as an essential provider of the Microsoft Xbox gaming platform and services, GameStop has expanded its Xbox family of product offerings to include Xbox All Access, which provides an Xbox console and 24 months of Xbox Game Pass Ultimate to players with no upfront cost. GameStop and Microsoft will both benefit from the customer acquisition and lifetime revenue value of each gamer brought into the Xbox ecosystem.

George Sherman, GameStop’s Chief Executive Officer, stated: “This is an exciting day at GameStop as we announce the advancement of an important partnership that capitalizes on the power of our operating platform and significant market share in gaming to accelerate our digital transformation; drive incremental revenue streams; and over time, further monetize the digital world of gaming. Since joining the Company last April, we have been on a mission to evolve our strategy to take advantage of our undisputed leadership position in gaming. Clearly, GameStop is a top destination for an entire spectrum of gaming products, and we are excited about the opportunity to leverage our capabilities in support of the launch of the next generation of gaming consoles and expand our reach and connection to the worldwide gamer community through this partnership.”

“GameStop has become a popular destination for gamers to find their favorite video games, hardware and accessories, socialize with others in the community, try out new games, and get educated on the latest tips and trends,” said Matt Renner, President, US Enterprise Commercial, Microsoft. “By harnessing the power of Dynamics 365 and Microsoft 365, GameStop will be able to modernize its technology infrastructure and support store associates and fans in new and exciting ways. This partnership also provides GameStop with advanced retail management technologies that will drive operational efficiencies throughout its omni-channel platform.”

Phil Spencer, Microsoft, Executive Vice President of Gaming, added: “For many years GameStop has been a strong go-to-market partner for our gaming products, and we are excited about continuing and evolving that relationship for the launch of the Xbox Series X|S. GameStop’s extensive store base, focus on digital transformation in an omni-channel environment and expert gamer associates remain an important part of our gaming ecosystem, and we’re pleased to elevate our partnership.”

Jim Bell, GameStop’s Chief Financial Officer commented, “We believe Microsoft’s integrated retail technology platform will enable the continued development of our frictionless omni-channel digital environment, providing customers with an exceptional cross-channel experience for all things video gaming.” Mr. Bell continued, “By standardizing on Microsoft 365 and Dynamics 365, all accessed with Microsoft Surface devices at our fingertips, we will be able to create a better connection with our associates and provide them with powerful new tools to deliver rich engaging experiences to our customers while significantly enhancing our cross-channel view of inventory ensuring the most efficient delivery of products to our customers.”

About GameStop

GameStop Corp., a Fortune 500 company headquartered in Grapevine, Texas, is the world’s largest omni-channel video game retailer, operates over 5,000 stores across 10 countries, and offers the best selection of new and pre-owned video gaming consoles, accessories and video game titles, in both physical and digital formats. GameStop also offers fans a wide variety of POP! vinyl figures, collectibles, board games and more. Through GameStop’s unique buy-sell-trade program, gamers can trade in video game consoles, games, and accessories, as well as consumer electronics for cash or in-store credit. The company’s consumer product network also includes www.gamestop.com and Game Informer® magazine, the world’s leading print and digital video game publication. General information about GameStop Corp. can be obtained at the Company’s corporate website. Follow @GameStop and @GameStopCorp on Twitter and Instagram and find GameStop on Facebook at www.facebook.com/GameStop.

Cautionary Statement Regarding Forward-Looking Statements – Safe Harbor
Expectations about quarterly results are based on preliminary unaudited information about the first fiscal quarter of 2020 and are subject to revision. Although the quarter is now completed, the Company is still in the early stages of standard financial reporting closing procedures. Accordingly, as normal quarter-end closing and review processes conclude, actual results could differ materially from these preliminary results. Factors that could cause actual results for the quarter to differ materially from those contemplated by these forward-looking statements include, but are not limited to, inaccurate assumptions; unrecorded expenses; changes in estimates or judgments; and facts or circumstances affecting the application of the Company’s critical accounting policies.

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management’s current beliefs, views, estimates and expectations, including as to the Company’s industry, business strategy, goals and expectations concerning its market position, future operations, margins, profitability, capital expenditures, liquidity and capital resources and other financial and operating information, including expectations as to future operating profit improvement. Such statements include without limitation those about the Company’s expectations for fiscal 2020, future financial and operating results, projections, expectations and other statements that are not historical facts. All statements regarding targeted and expected benefits of our transformation, capital allocation, profit improvement and cost-savings initiatives, and expected fiscal 2020 results, are forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties and actual developments, business decisions and results may differ materially from those reflected or described in the forward-looking statements. The following factors, among others, could cause actual results to differ materially from those reflected or described in the forward-looking statements: the uncertain impact, effects and results of pursuit of operating, strategic, financial and structural initiatives, including the Reboot strategic plan; the impacts of the COVID-19 outbreak on our business, including governmental restrictions intended to mitigate the outbreak; volatility in capital and credit markets, including changes that reduce availability, and increase costs, of capital and credit; the impact of the COVID-19 outbreak on capital markets; our inability to obtain sufficient quantities of product to meet consumer demand, including due to supply chain disruptions on account of trade restrictions, political instability, labor disturbances and product recalls; the timing of release and consumer demand for new and pre-owned products; our ability to continue to expand, and successfully open and operate new stores for our collectibles business; risks associated with achievement of anticipated financial and operating results from acquisitions; our ability to sustain and grow our console digital video game sales; our ability to establish and profitably maintain the appropriate mix of digital and physical presence in the markets we serve; our ability to assess and implement technologies in support of our omnichannel capabilities; the impact of goodwill and intangible asset impairments; cost reduction initiatives, including store closing costs; risks related to changes in, and our continued retention of, executives and other key personnel and our ability to attract and retain qualified employees in all areas of the organization; changes in consumer preferences and economic conditions; increased operating costs, including wages; disruptions to our information technology systems including but not limited to security breaches of systems protecting consumer and employee information or other types of cybercrimes or cybersecurity attacks; risks associated with international operations; increased competition and changing technology in the video game industry; changes in domestic or foreign laws and regulations that reduce consumer demand for, or increase prices of, our products or otherwise adversely affect our business; our effective tax rate and the factors affecting our effective tax rate, including changes in international, federal or state tax, trade and other laws and regulations; the costs and outcomes of legal proceedings and tax audits; and unexpected changes in the assumptions underlying our outlook for fiscal 2020. Additional factors that could cause our results to differ materially from those reflected or described in the forward-looking statements can be found in GameStop’s Annual Report on Form 10-K for the fiscal year ended February 1, 2020 filed with the SEC and available at the SEC’s Internet site at http://www.sec.gov or http://investor.GameStop.com. Forward-looking statements contained in this press release speak only as of the date of this release. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by any applicable securities laws.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

Forward-Looking Statements

Statements in this news release are “forward-looking statements” based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors described above as well as:

  • intense competition in all of our markets that may lead to lower revenue or operating margins;
  • increasing focus on cloud-based services presenting execution and competitive risks;
  • significant investments in products and services that may not achieve expected returns;
  • acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business;
  • impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;
  • cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position;
  • disclosure and misuse of personal data that could cause liability and harm to our reputation;
  • the possibility that we may not be able to protect information stored in our products and services from use by others;
  • abuse of our advertising or social platforms that may harm our reputation or user engagement;
  • the development of the internet of things presenting security, privacy, and execution risks;
  • issues about the use of artificial intelligence in our offerings that may result in competitive harm, legal liability, or reputational harm;
  • excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;
  • quality or supply problems;
  • the possibility that we may fail to protect our source code;
  • legal changes, our evolving business model, piracy, and other factors may decrease the value of our intellectual property;
  • claims that Microsoft has infringed the intellectual property rights of others;
  • claims against us that may result in adverse outcomes in legal disputes;
  • government litigation and regulatory activity relating to competition rules that may limit how we design and market our products;
  • potential liability under trade protection, anti-corruption, and other laws resulting from our global operations;
  • laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage;
  • additional tax liabilities;
  • damage to our reputation or our brands that may harm our business and operating results;
  • exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange;
  • uncertainties relating to our business with government customers;
  • adverse economic or market conditions that may harm our business;
  • catastrophic events or geopolitical conditions, such as the COVID-19 pandemic, that may disrupt our business; and
  • the dependence of our business on our ability to attract and retain talented employees.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q that are incorporated by reference in the Prospectus forming a part of the Registration Statement, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at http://www.microsoft.com/en-us/investor.