GameStop surges after forming strategic accord with Microsoft

GameStop is expected to get a surge in sales when new video-game consoles arrive in coming weeks, and the Microsoft partnership could help them extend the momentum.

GameStop, Microsoft, GameStop Microsoft partnership, Xbox, Xbox Games, Microsoft Surface, Xbox All Access

GameStop investor Ryan Cohen, the former head of Chewy.com, has been prodding the company to focus more on e-commerce, rather than its physical chain. (Image: Bloomberg)

GameStop Corp jumped as much as 27 per cent after a strategic partnership with Microsoft Corp gave investors fresh optimism that the video-game retailer can turn around its business.

Under a multiyear agreement, GameStop will use Microsoft’s cloud services to handle business operations, including finance, inventory and e-commerce, according to a statement Thursday. In-store workers also will use Microsoft Surface devices while they’re helping customers. And GameStop will offer Xbox All Access, a monthly service for the Xbox gaming console.

GameStop is expected to get a surge in sales when new video-game consoles arrive in coming weeks, and the Microsoft partnership could help them extend the momentum. A new Xbox and Sony PlayStation are debuting next month, which should drive traffic to GameStop’s stores and e-commerce site.

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Longer term, GameStop faces a tough challenge. Video-game companies are relying less on physical media and increasingly delivering their products online, making a brick-and-mortar chain less necessary.

GameStop investor Ryan Cohen, the former head of Chewy.com, has been prodding the company to focus more on e-commerce, rather than its physical chain. But GameStop has a massive retail footprint, with thousands of stores in 10 countries.

The shares climbed to as much as $11.90 on Thursday after GameStop announced the deal. Even before the jump, the stock was up 54 per cent this year, lifted by excitement about the new gaming consoles.

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