this post was submitted on 28 Sep 2023
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43
Ryan's Letter (twitter.com)
submitted 1 year ago by [email protected] to c/[email protected]
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Subject: Survival

I will be straight to the point.

It is not sustainable for GameStop to operate a money losing business. The mission is to operate hyper efficiently and profitably. Our expense structure must allow us to endure any adverse scenario. Whether it’s a difficult economy or revenue deceleration from shrinking software, we must be profitable. Our job is to make sure GameStop is here for decades to come. Extreme frugality is required. Every expense at the company must be scrutinized under a microscope and all waste eliminated. The company has no use for delegators and money wasters. I expect everyone to treat company money like their own and lead by example.

Prospering in retail means survival. If we survive, we stay in the game. Survival is avoiding the deadly sins that often lead retailers to self-destruct. This is usually a result of the following - buying bad inventory, using leverage, and running expenses too high. By avoiding these self-inflicted mistakes and focusing on the basics, GameStop can be here for a long time.

I expect everyone to roll up their sleeves and work hard. I’m not getting paid, so I’m either going down with the ship or turning the company around. I much prefer the latter.

It won’t be easy. Best of luck to us all.

Ryan

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[–] [email protected] 20 points 1 year ago

It comes off rather grim.

But, this is just a letter to set the stage for RC as the new CEO, what his employees can expect of him. Grim maybe, but it might just be hard dose of reality.

Recent words by Pulte also seem to lean towards this notion that we are up against powerful forces that oppose our success, and that victory won't be easy.

RC has emphasized to judge him by his actions and not his words. And, from my point of view, the action sequence in summary has gone kind of like this:

  • RC buys in to GameStop
  • RC replaces the entire board and becomes chairman
  • GameStop raises $1.7 billion through the 2 ATMs, pays off debts, provides funding for operations, etc.
  • 2 years later GameStop currently holds nearly $900 million in cash and a negligible amount of debt
  • GameStop's recent quarter showed very small losses overall, a major improvement over previous years
  • RC is now in the CEO chair and has the most at stake here

Though this letter has a particular tone that might come off as grim, it seems to me like GameStop is in a pretty safe position regardless. I've seen some comments on Reddit about appearing weak when you are strong, that whole art of war thing.

In any case, I trust that RC is the man for the job, he puts his money where his mouth is, and he works hard. I feel confident knowing that the interests of this person leading the company are in alignment with my own interests as a shareholder.

[–] [email protected] 9 points 1 year ago

This doesn't sound like him at all. I've posted a comment coming from the Reddit subs, but it seems like a bunch of his interviews, put into ChatGPT and spewed a bunch of negative sentiment.

I then noticed, "we must be profitable." That's not something he'd say like that. He always has learned the intersection of customers and profitability. Definitely not how his father taught him.

[–] [email protected] 8 points 1 year ago (3 children)

I find it odd, that people immediately jump to calling something like this fake, because it doesn't fit their idea of how something like this should read. Ryan Cohen has repeatedly shown that he has zero patience for people who aren't going above and beyond at their job. He has also said he wouldn't become CEO. To me this reads like his plans aren't working out and he has to take it in his own hands now.

I still believe the short thesis is correct, the shutting off of the buy button, the vanishing stocks in Germany after the split, it's all unprecedented.

That doesn't mean that Cohen, or the former CEO couldn't have made some bad calls running the business. The whole NFT thing was dead on arrival and didn't even address the second hand digital game market as it should have, but focussed on really wierd gaming experiences.

This doesn't seem too out of character to me.

[–] [email protected] 7 points 1 year ago (1 children)

The whole NFT thing was dead on arrival

I don't think that NFTs were necessarily a bad decision. It gives GameStop a stake in a potential transition from brick and mortar to digital downloads. Shareholders asked for an NFT dividend, similar to Overstock, so GameStop would need experience. And crypto in general could be a transparent alternative to a corrupt financial system. Gary Gensler shot down Ryan Cohen's balloon with Operation Chokepoint –– broadening the definition of securities, suing crypto companies, and creating regulatory uncertainty.

[–] [email protected] 4 points 1 year ago

Valid point.

I just don't see NFTs in video games being anything more than play to earn treadmills or more art NFT stuff that has no value. There really wasn't any sign GameStop was making sensible moves on that front.

Given the broader sentiment of gamers towards NFT stuff, I never really bought the whole idea that gaming with NFTs is going to be the next big thing. People don't want some shoddily coded shooter with NFT avatars. People want ownership and second hand markets for regular games. That's where I would see it fit in with GameStop. Get some big names to issue game keys in the form of NFTs, check a linked wallet for the NFT and launch if the NFT exists. Done with the game? Feel free to sell your NFT license with baked in profit sharing for the publisher / developer. That'd have been a thing and kicked DRM in the nuts, too.

Maybe that was their plan, Cohen never telegraphs his moves. But what I saw wasn't innovative or interesting, when it comes to their core business.

[–] [email protected] 5 points 1 year ago (1 children)

The whole NFT thing was dead on arrival

I think that's a bit premature.

While I'm sad that they shut down all the shareholder requests for an NFT dividend (for now), I still think the need filled by NFTs in gaming is undeniable in the long term, so I'm not ready to call the NFT marketplace dead yet. I imagine it would be pretty awesome if you were browsing in your local physical GS and could see and buy in-game assets right there in-store!

[–] [email protected] 1 points 1 year ago

I simply don't see it. Not for this use-case anyway. The Diablo 3 auction house was a disaster (I know it's not NFTs, but it comes down to the same thing as far as game economies are concerned, it "just being cosmetic" doesn't change anything there). Game developers have zero incentive to implement NFT cosmetics, because they can make way more money without them being NFTs and already are. The NFT concept itself is polluted and poisoned with scam after scam after scam. Every major publisher and developer received massive backlash to any implementation of it.

I only see it as a possibility for owning your video game license digitally and decentralized with the potential for reselling your games and baked in profit sharing for the original issuer. That's literally the only real possible and viable use case in gaming. It would also be able to replace invasive and performance hampering DRM. Simply check against a wallet if the NFT is present. If it isn't, you're done. But even here, developers and publishers have almost no incentive to implement this. Why only get a cut, when you can always get full price (minus marketplace costs) from each customer?

Honestly, I'm glad that they sort of pulled the plug on the wallet and everything. Not because I don't want that part to succeed, but because it shows there isn't the specter of sunk-cost fallacy haunting the C-Level of GameStop anymore. They tried, it didn't yield the expected results and won't for a while longer, they're focusing on other things.

I don't doubt that eventually, there will be some decent games that have some sort of NFT implementation that doesn't look and plays like a shabby asset flip, but it's simply not a horse that's been born yet to bet on.

[–] [email protected] -3 points 1 year ago

I find you odd.

[–] [email protected] 7 points 1 year ago

The letter is so out of character that it's almost hilarious... after 3 years of silence he comes out with this doom and gloom crappy letter? If somebody crafted a letter for maximum spin-effect of painting GameStop in a negative light, it could hardly be more perfect.

I know what Mr. Occam and hir razor would believe in this scenario.

[–] [email protected] 6 points 1 year ago (1 children)

I don’t know if I can link to Reddit here but, I think this post says it all: https://reddit.com/r/Superstonk/s/V2fc4761Ui

[–] [email protected] 3 points 1 year ago* (last edited 1 year ago)

I don’t know if I can link to Reddit here

Yes, you can link to Reddit. Lemmy is uncensored. But the reverse can get you banned.

[–] [email protected] 5 points 1 year ago* (last edited 1 year ago)

This is obviously fake. Not the tone of a corporate letter, an unexpected negative sentiment, not a single shred of evidence that it is real besides an anonymous twitter account.

edit: now apparently it's confirmed. I'll be damned.

[–] [email protected] 3 points 1 year ago

once their idea for an NFT store failed it had to reconsider its options

[–] [email protected] 3 points 1 year ago (1 children)

Fake lol

[–] [email protected] 0 points 1 year ago (2 children)

Well, if it is fake, we will soon know, because Ryan would protest it, right?

[–] [email protected] 3 points 1 year ago

Not sure he would tbh.

Don't interrupt your enemy making a mistake and all that.

[–] [email protected] 1 points 1 year ago

Who knows, I'm not sure if it would even get on his radar

[–] [email protected] 2 points 1 year ago (1 children)

The final nail in the coffin of the 'it's legit' argument: https://www.reddit.com/r/Superstonk/comments/16van7s/indisputable_proof_ryan_cohen_did_not_write_the/

[–] [email protected] 3 points 1 year ago (1 children)

I wouldn't agree that this disproves the letter. Here's a good thread from that topic explaining a bit more nuance about how Google cache works.

https://www.reddit.com/r/Superstonk/comments/16van7s/indisputable_proof_ryan_cohen_did_not_write_the/k2pwby4/

[–] [email protected] -1 points 1 year ago (1 children)

Force an "unverified" edit?...

Otherwise idk man, mods here aren't paying any more attention than SS.

[–] [email protected] 10 points 1 year ago

I'm not sure what you mean? We have a different moderation style than Superstonk and than Reddit.

From an admin level, we will not be limiting any content unless it's illegal in nature. At a community level, we encourage open discussion and for users to engage openly and to seek the truth together. If you open a community here, you will be able to moderate however you choose (so long as illegal content is controlled for, to avoid liability for myself and other admins). All of this is detailed more in the Instance Policies stickypost.

Here on Lemmy, you'll know what I'm saying is true to how we are acting because all admin and moderation logs are transparent.

[–] [email protected] 1 points 1 year ago

Fake fuckin news