GameStop ousted Matt Furlong as CEO on Monday in a move the company said in an SEC filing was “without cause.”
Furlong resigned from its board on the same day. Ryan Cohen has in turn been appointed executive chairman.
Furlong took on the role in June 2021, lasting two years.
“Leadership transitions can be inherently difficult to manage,” the company’s quarterly securities filing stated. ”And failure to timely or successfully implement transitions may cause disruption within the Company, including execution of our transformational plans. This may adversely impact our financial performance and ability to meet operational goals and strategic plans, our ability to retain and hire other key members of management, and the market price of our Class A common stock.”
GameStop declined to hold a quarterly earnings call. This will mark its fourth consecutive quarterly fall in revenue following the heights GameStop stumbled into during its early 2021 meme-stock golden age, wherein social media helped propel the company to heights many experts viewed as unsustainable.
“Our Board of Directors terminated Matthew Furlong’s employment with the Company as its President and Chief Executive Officer without Cause (as such term is defined in Mr. Furlong’s letter of employment dated June 9, 2021),” the filing said, indicating that Furlong did not engage in misconduct and is being let go for other, unrelated reasons that haven’t been detailed.
Shortly after news broke concerning Furlong’s firing, Cohen posted a cryptic message on Twitter.
Whether this means Cohen doesn’t anticipate he’ll be executive chairman for long, or whether it’s a tweet pertaining to something else entirely, is unclear.
“We believe the combination of these efforts to stabilize and optimize our core business and achieve sustained profitability while also focusing on capital allocation under Mr. Cohen’s leadership will further unlock long-term value creation for our stockholders,” the quarterly securities filing said.
GameStop and Cohen did not immediately respond to TheWrap’s request for comment.
Cohen was part of the wave that helped elevate GameStop during its 2021 meme-fueled highs. He was already giving the orders at the company before this shakeup, sources close to the matter told Kotaku, indicating this change simply makes matters official.
GameStop is far from the only tech-entrenched company to undergo drastic shakeups this year. Elsewhere in the space where gaming and technology intersect, layoffs have been widespread, despite the industry’s giants still doing well in terms of pure revenue against a tough economic backdrop.
GameStop, in particular, isn’t just suffering from a bad beat; it has existential struggles to contend with as its brick-and-mortar business model continues to lose relevancy amid the gaming business’ transition to a digital landscape. While used game trade-ins are still a lure that bring many customers to GameStop, digital adoption is rising, and companies are increasingly deemphasizing the physical market.
For example, major upcoming release “Alan Wake 2” is skipping physical releases altogether, which is far from the norm for a title from a well-known development studio. Even when tangible media is purely a formality and a game’s content still needs to be digitally downloaded, most publishers opt to release a physical disc because it’s industry-standard practice. If “Alan Wake 2” is any indication, that may not be the case for long.