GameStop Says Physical Games No Longer Matter. So, What Exactly Is GameStop Now?

For decades, GameStop existed because physical video games mattered.

Players visited its stores to buy new releases, trade in games they had finished, hunt for older titles, reserve upcoming consoles, and argue with employees about whether the scratched copy behind the counter was really the “last one available.” The company became one of the most recognizable gaming retailers in America by turning physical games into an ecosystem.

Now, GameStop CEO Ryan Cohen says the disappearance of physical games would be “totally irrelevant” to the company’s future.

During a recent Bloomberg interview, Cohen was asked about Sony reportedly planning to phase out physical PlayStation discs beginning in 2028. He responded that software, including physical games, represents less than 12 percent of GameStop’s current business. Cohen argued that the company now generates more of its sales through collectibles and other products, making the decline of discs far less threatening than many people assume.

That may be reassuring to investors, but it raises a much bigger question for customers.

If physical games no longer matter to GameStop, what exactly is GameStop?

GameStop Is Quietly Becoming a Collectibles Company

The answer appears to be trading cards, collectibles, gaming accessories, investments, and whatever other opportunities GameStop believes can generate stronger margins than selling new video games.

The transformation is already visible inside its stores. Walk into many GameStop locations today and the shelves are filled with Pokémon cards, Funko Pops, action figures, anime merchandise, plush toys, statues, apparel, and accessories. Depending on the location, the actual video-game section may feel smaller than the collection of products surrounding it.

GameStop’s financial results support that shift.

During the first quarter of fiscal 2026, the company reported $835.3 million in net sales, a 14 percent increase from the same period one year earlier. GameStop said that growth was driven primarily by collectibles. Collectibles generated approximately $348.9 million during the quarter, making them the company’s largest sales category and accounting for roughly 42 percent of total sales.

Trading cards have become especially important. In its annual filing, GameStop acknowledged that a significant portion of the revenue and profit within its collectibles business now comes from trading cards, including Pokémon cards. The company has also expanded its relationship with Professional Sports Authenticator, allowing customers to submit cards for grading through participating GameStop stores.

That strategy makes sense. Trading cards are physical products that cannot be downloaded from the PlayStation Store. They encourage repeat visits, create opportunities for resale, and attract collectors who may spend hundreds or even thousands of dollars chasing rare cards.

In other words, GameStop is replacing one physical market with another.

Cohen’s Claim Needs Some Context

Cohen’s argument that software represents less than 12 percent of GameStop’s business does not perfectly align with the company’s most recent full-year financial filing.

For fiscal 2025, GameStop reported approximately $729.3 million in software sales from total net sales of $3.63 billion. That means software represented about 20 percent of annual sales. Collectibles generated approximately $1.06 billion, while hardware and accessories remained the company’s largest category at roughly $1.84 billion.

The difference may come from Cohen referring to more recent internal sales, a narrower definition of the business, or a specific current period. Still, the broader trend is undeniable. Software sales are shrinking while collectibles are growing.

GameStop reported that its software revenue declined by more than 27 percent during fiscal 2025, while collectibles revenue increased by nearly 48 percent.

Cohen may be exaggerating how irrelevant physical games have already become, but he is not wrong about the direction of the industry.

The uncomfortable truth is that the traditional GameStop business model is disappearing.

The Trade-In Model Is Dying With the Disc

GameStop’s original advantage was never simply selling video games. Walmart, Best Buy, Target, and Amazon could all do that.

GameStop’s real advantage was the trade-in system.

Customers could bring in old games, receive store credit, and use that credit toward a new release. GameStop could then resell the same used game multiple times without paying the publisher another dime. The customer received convenience, while GameStop collected some of its best profit margins.

Digital games break that system completely.

A customer cannot trade in a PlayStation Network download. They cannot lend it to a friend, sell it online, or place it on a shelf as part of a personal collection. Once the purchase is attached to an account, the customer’s options are controlled by the platform holder.

That represents a serious loss for consumers, especially younger players and families who rely on used games to make the hobby more affordable.

It also removes the economic engine that helped make GameStop important.

Cohen may say physical software is irrelevant to the company’s future, but physical ownership remains relevant to the customers who built GameStop in the first place.

Is GameStop Still a Gaming Store?

GameStop still sells consoles, controllers, headsets, storage devices, keyboards, and other gaming accessories. Hardware and accessories remain a major portion of the company’s revenue.

The company is not abandoning gaming entirely. It is broadening the definition of what a gaming retailer can be.

Anime merchandise, Pokémon cards, collectibles, PC accessories, retro products, and tabletop items all overlap with gaming culture. A customer who walks into GameStop for a controller may leave with a graded card or a Dragon Ball figure. From a business perspective, that overlap is valuable.

The problem is that the company risks becoming a store without a clear identity.

Is GameStop a gaming retailer?

Is it a trading-card shop?

Is it an anime and pop-culture merchandise store?

Is it an electronics reseller?

Is it a holding company built around cash, marketable securities, cryptocurrency, and potential acquisitions?

At the moment, the honest answer may be all of the above.

GameStop reported having approximately $9.7 billion in cash, marketable securities, digital assets, related receivables, and pledged collateral at the end of its first quarter. The company has become financially stronger even while its traditional retail identity has become harder to define.

GameStop may eventually become less recognizable as a video-game store and more valuable as a diversified company. Whether customers will remain emotionally connected to that version of GameStop is another matter.

GameStop Cannot Survive on Nostalgia Alone

There is a strange irony in GameStop dismissing physical games while benefiting from a collectibles market driven largely by physical ownership.

People collect cards, statues, retro consoles, steel book editions, and physical games because ownership matters to them. They want something they can hold, display, trade, preserve, or sell.

GameStop appears to understand that instinct when it comes to Pokémon cards. It simply no longer believes boxed video games will remain the most profitable expression of it.

That may be smart business. It may also be an admission that the company whose name literally tells customers to stop and buy games is preparing for a future in which selling games is no longer its central purpose.

GameStop does not need to remain frozen in 2007. Refusing to adapt would likely turn it into another retail cautionary tale.

Still, adaptation requires more than filling stores with random merchandise and hoping Pokémon carries the quarter. GameStop needs to offer something that Amazon, digital storefronts, local card shops, and major retailers cannot easily duplicate.

That could mean becoming a genuine community hub for gaming and collecting. Stores could host trading-card events, retro tournaments, launch parties, anime gatherings, repair services, grading submissions, and local creator showcases. GameStop has thousands of physical locations and one of the most recognizable names in gaming. Those advantages should be used to build experiences, not merely shelves.

Otherwise, GameStop risks surviving the death of physical games while losing the reason gamers cared about it.

Ryan Cohen may be right that discs no longer determine GameStop’s financial future. The company has enough money, collectibles revenue, and alternative investments to evolve beyond its old model.

The question is whether that evolution will produce a better GameStop or simply a profitable company that happens to still use the name.