Take a look inside Wall Street darling Ryan Cohen’s ambitious plan to ‘transform’ the retailer into the Amazon of gaming

Ryan Cohen - Chewy
Chewy cofounder and former CEO Ryan Cohen is now the head of RC Ventures, an investment firm that’s taken a 12% stake in GameStop.

  • Chewy cofounder and former CEO Ryan Cohen is the largest individual GameStop shareholder.
  • He’s also in charge of the board, and intends to turn the company into the Amazon of gaming.
  • Cohen is already making major moves at the company, and he has big plans for the future.
  • Visit the Business section of Insider for more stories.

What does Ryan Cohen want with GameStop?

That’s the big, unanswered question at the heart of his 12.9% ownership stake in the company – an investment he made well before GameStop became a meme stock.

Cohen, who cofounded Chewy and acted as CEO before it sold to PetSmart for $3.35 billion in 2017, does not have a background in the video game industry. His claim to fame is outfoxing Amazon at its own game – e-commerce – in a specific category: pets. That’s an especially meaningful claim to fame when it comes to Wall Street, which saw Cohen’s involvement in the company as a reason to buy the ailing retailer’s stock before Reddit found it.

Read more: Ryan Cohen made millions when Chewy got acquired. Now the millennial entrepreneur has a plan to turn around GameStop.

But Cohen is no casual investor in GameStop – he’s the chairman of its board, and an activist investor who has successfully lobbied the company to follow his advice several times thus far. He is clearly in this for the long term.

Though the lingering question of “Why GameStop?” remains unanswered, we know a lot about Cohen’s plans for the future of the company.

1. Cohen wants GameStop to become a technology company, with a focus on ecommerce over brick-and-retail stores.

gamestop store
A GameStop Corp. store on November 5, 2013 in North Las Vegas, Nevada.

Cohen’s investment firm, RC Ventures, owns 12.9% of GameStop. That stake makes it the second-largest single shareholder of GameStop.

Those shares cost tens of millions of dollars in 2020, and they put Cohen in a position to more directly engage with the company’s leadership. But those private conversations apparently didn’t go very well.

“Given that our attempts to privately engage with you since the summer have yielded little progress, we feel compelled to send a clear message to the Board today,” Cohen wrote in an open letter aimed at GameStop’s board of directors published in November 2020.

“GameStop’s leadership should immediately conduct a strategic review of the business,” he said, “and share a credible plan for seizing the tremendous opportunities in the rapidly-growing gaming sector.”

The letter, overwhelmingly, focused on the company’s need to transition to ecommerce.

“GameStop’s challenges stem from internal intransigence and an unwillingness to rapidly embrace the digital economy,” the letter said. “GameStop needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences – not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”

Throughout his letter, Cohen directly criticizes the company’s leadership – both its executive suite and its board of directors, to whom the letter is addressed.

GameStop CEO and board member George Sherman, “appears committed to a twentieth-century focus on physical stores and walk-in sales, despite the transition to an always-on digital world,” Cohen said, and the board lacks “the type of strategic vision” necessary for GameStop, “to pivot toward becoming a technology-driven business that excels in the gaming and digital experience worlds.”

That criticism appeared to have a major impact, as GameStop announced in early January that Cohen and two of his former Chewy lieutenants would become new members of the board. Soon after, Cohen was put in charge of a committee created to reshape GameStop and appointed the chairman of its board.

2. He’s swapping the company’s current leadership, both its board and c-suite, for former Amazon and Chewy leaders.

GameStop execs (April 2021)

Since Cohen joined GameStop’s board and was put in charge of the Strategic Planning and Capital Allocation Committee, the company’s entire executive suite has been cleared out.

That includes CEO George Sherman, who is stepping down in the near future, and CFO Jim Bell, who was suddenly forced out of his role at the company after the board of directors “lost faith” in him, according to a person familiar with the decision who spoke with Insider. At the same time, a gaggle of former Amazon and Chewy leaders have been elected in their place.

Similarly, the company’s board of directors is being completely flipped – at the company’s annual shareholder meeting in June, it plans to elect a small group of Cohen’s colleagues to the board. And Cohen is expected to be elected chairman of the board.

In the last six months, Cohen has completely reshaped the leadership of GameStop.

3. The potential future of GameStop: online trade-ins.

GameStop Clerk
A customer laughs with a clerk as he purchases a copy of the video game “Grand Theft Auto IV” at a GameStop store in New York

Game trade-ins, and their subsequent resale, are the lifeblood of GameStop.

In September 2020, when Cohen initially purchased a significant chunk of the company’s shares, he privately proposed a plan to the board to focus GameStop on e-commerce opportunities.

One example of those opportunities is tied to GameStop’s core business: reselling used games.

Cohen reportedly proposed an online version of the retailer’s (in)famous game trade-in program.

During those talks, he proposed a major expansion of GameStop’s online footprint, according to Bloomberg. Beyond just games, GameStop’s online store would offer “a wide range of merchandise,” the report said, and prioritize fast shipping.

Cohen has yet to publicly spell out his specific plans, and representatives repeatedly declined requests for comment.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

Read the original article on Business Insider

Get used to playing 2020’s biggest video games: The pandemic is devastating this year’s lineup

Gran Turismo 7
Upcoming PlayStation 5 game “Gran Turismo 7” is among the group of games that have already been delayed out of 2021.

  • In 2020, the video game industry enjoyed explosive profits with more people than ever stuck indoors.
  • In 2021, the game release calendar is slimmer than ever and several major games are being delayed.
  • For many of these games, the difficulty of development during a pandemic is the cause of the delay.
  • Visit the Business section of Insider for more stories.

When the COVID-19 pandemic caused millions of Americans to shelter in place starting in early March 2020, “Animal Crossing: New Horizons” was just days away from launch.

The combination of the game’s charming atmosphere, its busywork, and a sudden infusion of free time for millions of people turned “Animal Crossing” into one of Nintendo’s biggest hits in years.

It was one of several games that had especially strong sales in 2020 – the benefit of accidentally lining up launch with a totally unexpected global pandemic. But with 2020 rapidly fading into the past, the other impact of the pandemic on the video game industry is starting to emerge: Several of this year’s biggest games have already been delayed to 2022 due to development struggles related to the pandemic.

The developers of a marquee PlayStation 5 game, “Gran Turismo 7,” directly cited the impact of the pandemic for their delay.

Gran Turismo 7

Making the game was, “impacted by COVID-related production challenges,” Sony told GQ in late February. The game’s launch was moved from 2021 into 2022.

“With the ongoing pandemic, it’s a dynamic and changing situation and some critical aspects of game production have been slowed over the past several months,” the statement said.

For a game series like “Gran Turismo,” which intends to simulate real-life racing, pandemic-related development challenges abound: There is no way to capture the sound of an engine, or to model a real-life car, or to track a race, without being there in person.

But even without the added complications of creating a racing video game, several other major video games have been pushed out of the 2021 launch window into next year.

Hogwart's Legacy
“Hogwarts Legacy” takes place in the 1800s.

A long-in-development game based on the “Harry Potter” book franchise was scheduled to launch in 2021: “Hogwarts Legacy” will have players creating their own wizard and progressing through a unique story set long before the events of the books.

Though the game has been cooking for at least the last three years, WB Games announced a delay to 2022 back in early January.

“Creating the best possible experience for all of the Wizarding World and gaming fans is paramount to us so we are giving the game the time it needs,” a statement published on Twitter said.

It’s one of two major games from Warner Bros. that have been pushed back into next year.

Gotham Knights

“Gotham Knights,” a Batman spinoff game, was also just recently delayed into next year.

Instead of playing as the Dark Knight, players control Nightwing, Batgirl, Robin, and Red Hood in a Gotham City that has no Batman. Players will have to wait until at least 2022 to give it a shot.

“We are giving the game more time to deliver the best possible experience for players,” the statement said.

Notably, it’s still March – there’s a lot of 2021 left, which means these games likely have a long way to go before they’re ready for publishing. That’s especially notable right now, in early 2021, when new owners of new consoles from Xbox and PlayStation are desperately in need of new games to play.

This isn’t a surprise problem: Xbox leader Phil Spencer even warned about the impacts of the pandemic on 2021’s game lineup in an interview with Insider back in May 2020, as did Nintendo leadership in a May 2020 investor call. Though all three major console makers have a handful of major games on the horizon, 2021’s game release calendar for each is looking slim.

When Nintendo laid out its plans for the first half of the year in a recent video presentation, fans largely balked: Aside from a new “Mario Golf” game, there are next-to-no heavy hitters scheduled for launch on the Switch in the first six months of 2021.

As coronavirus vaccines are distributed worldwide, and work on video games returns to some semblance of pre-pandemic normalcy, the cadence of game launches will assuredly return.

For now, though, 2021 is looking light on major games – and the pandemic is largely to blame.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

Read the original article on Business Insider

Despite GameStop’s stock boom, the company is still struggling – take a look inside Ryan Cohen’s ambitious plan to ‘transform’ the retailer into the Amazon of gaming

Ryan Cohen - Chewy
Chewy cofounder and former CEO Ryan Cohen is now the head of RC Ventures, an investment firm that’s taken a 12% stake in GameStop.

  • Chewy cofounder and former CEO Ryan Cohen is the largest individual GameStop shareholder.
  • He’s also a board member, and is intent on turning the company into the Amazon of gaming.
  • Cohen is already making major moves at the company, and he has big plans for the future.
  • Visit the Business section of Insider for more stories.

What does Ryan Cohen want with GameStop?

That’s the big, unanswered question at the heart of his 12.9% ownership stake in the company – an investment he made well before GameStop became a meme stock.

Cohen, who cofounded Chewy and acted as CEO before it sold to PetSmart for $3.35 billion in 2017, does not have a background in the video game industry. His claim to fame is outfoxing Amazon at its own game – e-commerce – in a specific category: pets. That’s an especially meaningful claim to fame when it comes to Wall Street, which saw Cohen’s involvement in the company as a reason to buy the ailing retailer’s stock before Reddit found it.

Read more: Ryan Cohen made millions when Chewy got acquired. Now the millennial entrepreneur has a plan to turn around GameStop.

But Cohen is no casual investor in GameStop – he’s a member of the board, and an activist investor who has successfully lobbied the company to follow his advice several times thus far. He is clearly in this for the long term.

Though the lingering question of “Why GameStop?” remains unanswered, we know a lot about Cohen’s plans for the future of the company.

1. Cohen wants GameStop to become a technology company, with a focus on ecommerce over brick-and-retail stores.

gamestop store
A GameStop Corp. store on November 5, 2013 in North Las Vegas, Nevada.

Cohen’s investment firm, RC Ventures, owns 12.9% of GameStop. That stake makes it the second-largest single shareholder of GameStop.

Those shares cost tens of millions of dollars, and they put Cohen in a position to more directly engage with the company’s leadership. But those private conversations apparently didn’t go very well.

“Given that our attempts to privately engage with you since the summer have yielded little progress, we feel compelled to send a clear message to the Board today,” Cohen wrote in an open letter aimed at GameStop’s board of directors published in November 2020.

“GameStop’s leadership should immediately conduct a strategic review of the business,” he said, “and share a credible plan for seizing the tremendous opportunities in the rapidly-growing gaming sector.” 

The letter, overwhelmingly, focused on the company’s need to transition to ecommerce.

“GameStop’s challenges stem from internal intransigence and an unwillingness to rapidly embrace the digital economy,” the letter said. “GameStop needs to evolve into a technology company that delights gamers and delivers exceptional digital experiences — not remain a video game retailer that overprioritizes its brick-and-mortar footprint and stumbles around the online ecosystem.”

2. He wants to reshape the company’s leadership, and has already begun doing just that.

GameStop CFO Jim Bell
Former GameStop CFO Jim Bell was ousted from the company in late February.

Throughout his letter, Cohen directly criticizes the company’s leadership — both its executive suite and its board of directors, to whom the letter is addressed.

GameStop CEO and board member George Sherman, “appears committed to a twentieth-century focus on physical stores and walk-in sales, despite the transition to an always-on digital world,” Cohen said, and the board lacks “the type of strategic vision” necessary for GameStop, “to pivot toward becoming a technology-driven business that excels in the gaming and digital experience worlds.”

That criticism appeared to have a major impact, as GameStop announced in early January that Cohen and two of his former Chewy lieutenants would become new members of the board. Pending a vote in June, the trio will make up one-third of the board’s membership.

Soon after Cohen joined the board, major c-suite changes began.

Amazon vet Matt Francis was hired on as the CTO in early February. A former Amazon Web Services engineering lead, he’s tasked with, “overseeing e-commerce and technology functions” for GameStop.

Then, in late February, CFO Jim Bell was suddenly forced out of his role at the company. The board of directors “lost faith” in Bell, according to a person familiar with the decision who spoke with Insider.

3. Cohen is in charge of a newly announced committee that intends to “transform” the company.

Ryan Cohen - Chewy

Just this week, GameStop announced that Cohen is in charge of a new committee at the company that intends to, “identify initiatives that can further accelerate the company’s transformation.”

The “Strategic Planning and Capital Allocation Committee” is tasked with “identifying actions that can transform GameStop into a technology business and help create enduring value for stockholders,” GameStop said in a press release on March 8.

If that language sounds familiar, that’s because it’s very similar to the language used by Cohen in his letter to the board last November.

The group — which includes Cohen, former Chewy exec Alan Attal, and activist investor Kurt Wolf — was seemingly created to carry out the changes proposed by Cohen last year.

4. One potential for GameStop’s future: online trade-ins.

GameStop Clerk
A customer laughs with a clerk as he purchases a copy of the video game “Grand Theft Auto IV” at a GameStop store in New York

In September 2020, when Cohen initially purchased a significant chunk of the company’s shares, he privately proposed a plan to the board to focus GameStop on e-commerce opportunities.

One example of those opportunities is tied to GameStop’s core business: reselling used games.

Cohen reportedly proposed an online version of the retailer’s (in)famous game trade-in program.

During those talks, he proposed a major expansion of GameStop’s online footprint, according to Bloomberg. Beyond just games, GameStop’s online store would offer “a wide range of merchandise,” the report said, and prioritize fast shipping.

Cohen has yet to publicly spell out his specific plans, and his representative didn’t respond to a request for comment as of publishing.

Got a tip? Contact Insider senior correspondent Ben Gilbert via email (bgilbert@insider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

Read the original article on Business Insider

The 10 best video games of 2020, according to critics

animal crossing new horizons nintendo switch
“Animal Crossing: New Horizons”

Whether you were carefully outfitting a tropical island, exploring City 17 as Gordon Freeman, or something else entirely, there were a ton of great games to play in 2020.

And it was quite a year for gaming, with more people than ever turning to video games as the ongoing pandemic forced millions indoors. 

But what’s the best of the best? Here’s how critics ranked the top 10 games of 2020:

10. “F1 2020”

F1 2020

Platforms: PlayStation 4, Xbox One, PC, Google Stadia

9. “Crusader Kings III”

Crusader Kings 3

Platforms: PC, Mac, Linux

8. “Microsoft Flight Simulator”

Microsoft Flight Sim (Hurricane Laura)

Platforms: PC (and coming to Xbox One and Xbox Series S|Series X)

7. “Demon’s Souls”

Demon Souls PlayStation 5 PS5 Demon Souls

Platforms: PlayStation 5

6. “Ori and the Will of the Wisps”

Ori and the Will of Wisps

Platforms: Xbox One, Xbox Series S|X, Nintendo Switch, PC

5. “Half-Life: Alyx”

Half-Life Alyx

Platforms: PC

4. “Hades”

Hades (game)

Platforms: Nintendo Switch, PC

3. “Dragon Quest XI S: Echoes of an Elusive Age – Definitive Edition”

Dragon Quest XI S: Echoes of an Elusive Age - Definitive Edition

Platforms: Nintendo Switch, PlayStation 4, Xbox One, and PC

2. “The Last of Us: Part II”

The Last of Us: Part II

Platforms: PlayStation 4

1. “Persona 5 Royal”

Persona 5 Royal

Platforms: PlayStation 4

Check out the full list on Metacritic right here!

Got a tip? Contact Business Insider senior correspondent Ben Gilbert via email (bgilbert@businessinsider.com), or Twitter DM (@realbengilbert). We can keep sources anonymous. Use a non-work device to reach out. PR pitches by email only, please.

Read the original article on Business Insider