By TeeJay Small
| Published
Consumers of a certain age may have distinct memories of an analog era, before Netflix, Steam, and the App Store shifted every purchase to digital home streaming. Before online retailers were all the rage, GameStop was the premier destination for video games, consoles, and a wide range of Nintendo merchandise. Now, it seems like GameStop is officially preparing to enter the digital era (only about a decade and a half too late,) as Variety reports the business has made a $56 billion bid to acquire eBay. The unsolicited bid has not yet resulted in a sale, though it did drive eBay stock prices up by a margin of 4 percent.
The details of the acquisition are fairly straightforward, if a little unexpected. If and when the sale goes through, GameStop will purchase a 100 percent stake in the online auction outlet, valuing eBay at over $55 billion. Half of the money from the sale will be paid out in cash, and the other half will be covered by GameStop stock shares. The video game retailer also plans to procure a $20 billion loan from TD Bank in order to ensure it has enough cash on hand.
Currently, eBay’s board has expressed that it will “carefully review and consider” the offer, though consumers are a bit skeptical. For now, there’s no word on how the sale would impact either business or if eBay would simply become liquidated as a digital sales outlet for GameStop. If this is the case, GameStop will surely have its work cut out for it, since Steam and other digital game sellers have an insurmountable lead.
Of course, as Variety notes, current GameStop CEO Ryan Cohen has been working tirelessly to bring the corporation into the 21st century. Since taking over in 2021, Cohen has added hundreds of millions in net income, all without taking a salary or any cash bonuses. Instead, Cohen receives most of his pay through stock options, so he’s got a serious vested interest in pumping GameStop stock wherever possible. If anyone is capable of handling this transition, he seems primed for the responsibility.
The major question that hangs over this acquisition is, why eBay? Surely it would be cheaper for GameStop to build its own digital library, or even acquire a lesser-known IP and scale to size. The auctioning and bartering system eBay uses isn’t wholly unique to their platform, and the service has already begun to wane in popularity throughout the 2020s. For now, we’ll just have to wait and see if there’s a larger financial play at hand. And perhaps do so while streaming video games directly from the PlayStation Store.
