GameStop is closing stores faster than ever as more people buy games online instead of on discs. At the same time, CEO Ryan Cohen’s new pay deal only pays him if the company hits huge stock‑market and profit targets, which is raising concerns about how those goals might affect workers and stores.
Shrinking stores and lost jobs
GameStop has shut about 590 U.S. stores in 2024 and is now closing roughly 400 to 410 more American locations as it moves through early 2026. In total, more than 1,000 stores worldwide have disappeared over roughly two years, cutting the chain’s physical footprint by about half from its peak earlier in the last decade. The company describes this as a “store portfolio optimization review,” which essentially means closing shops that no longer make financial sense as customers move to digital purchases.
These shutdowns are happening across at least 42 U.S. states, including big markets like California, Texas, Florida, New York, and Pennsylvania. Many employees only find out about closures when signs go up on the doors, and there is no official public list, so workers often rely on internal messages and community‑run closure trackers to understand what is happening.
For affected staff, this strategy translates into lost income, broken routines, and sudden job searches, with some offered transfers that require longer commutes or schedule changes that do not work for their families or second jobs.
Why physical game stores are fading
GameStop’s problems are part of a larger shift in how games are sold and played, as digital downloads and subscriptions replace physical discs. Console makers and platforms like Steam now sell games directly through online stores, while cloud gaming and digital libraries let players access titles instantly without visiting a shop. Digital buying also avoids shipping delays, stock shortages, and the need to store boxes at home, making it more convenient for many customers.
Because of this shift, physical retailers like GameStop have fewer big launch events and fewer exclusive products to draw customers into stores. The company has tried to adapt by focusing on preorders, collectibles, and moving inventory into higher‑traffic locations, but smaller or slower stores can end up looking empty and become likely targets for closure.
Meanwhile, large competitors such as Amazon, Walmart, and Best Buy can spread their costs over huge online and in‑store operations, making it hard for a specialty chain focused on games to compete.
Cohen’s high‑risk pay package
In early January 2026, GameStop’s board unveiled a new pay package for CEO Ryan Cohen that is entirely based on performance targets, with no salary, no cash bonuses, and no guaranteed stock. Instead, Cohen would receive stock options on about 171.5 million shares that only vest if GameStop reaches extremely high goals, including a $100 billion market value and $10 billion in cumulative performance EBITDA. The full package has been valued at up to $35 billion on paper, but he earns nothing if those milestones are not met, and shareholders still need to approve the deal at a special meeting.
This plan stands in sharp contrast to GameStop’s current situation, as its market value is closer to about $9–10 billion and its revenue is under pressure. In its latest reported quarter, the company brought in about $821 million in sales, missing analysts’ expectations and reflecting weaker demand for physical games and hardware.
Supporters say Cohen’s all‑or‑nothing structure shows confidence and ties his fate to shareholders, while critics worry that connecting such a huge potential payout to market cap and EBITDA could push management toward aggressive cost cutting over long‑term investment.
An uncertain future for GameStop
GameStop’s rapid downsizing looks more like what is usually seen in bankruptcies than in a company that still reports profits, which has led experts to describe this as one of the steepest contractions in its history. By closing hundreds of weaker locations, reducing expenses, and focusing on fewer, higher‑volume stores plus digital efforts, the company aims to improve cash flow and boost earnings measures tied directly to Cohen’s potential payout. Management also points to a solid cash position and relatively low debt as a buffer that allows it to take bold steps while it tries to reshape the business.
Yet many analysts doubt GameStop can realistically reach a $100 billion market value in a world where digital platforms and tech giants increasingly control how games are bought and updated. For shareholders, the key question is whether Cohen’s e‑commerce background can turn a smaller, leaner GameStop into a sustainable, tech‑driven company; for workers and communities losing stores, the immediate concern is what will replace the jobs and gathering spots that are disappearing as physical game retail continues to shrink.
Sources:
Fast Company, GameStop closing stores 2026: list of doomed locations grows, January 6 2026
The Verge, GameStop is kicking off 2026 by shutting down over 400 stores in 42 states, January 11 2026
Military.com (republishing GameRant), GameStop is Closing Hundreds of Stores In January 2026, January 8 2026
Retail Dive, GameStop floats CEO pay entirely tied to performance, January 6 2026
Investing.com, GameStop announces performance-based stock option award for CEO Ryan Cohen, January 8 2026