A packaging controversy during the Nintendo Switch 2 launch nearly sent GameStop into crisis — and the company’s CEO revealed how he turned the fiasco into a rousing success.
GameStop Chairman and CEO Ryan Cohen joined FOX Business host Charles Payne on a recent episode of “Making Money” to discuss the controversy, dubbed “Staplegate,” and his company’s transformation.
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During the launch of the highly-anticipated Nintendo Switch 2, GameStop employees in Staten Island accidentally stapled receipts onto console boxes, damaging the cardboard and puncturing screens or other parts of the consoles. Instead of succumbing to the subsequent public relations crisis, Cohen turned the issue into an opportunity.
GameStop decided to auction off one of the damaged Switch 2 consoles and the staple that penetrated the boxes. The incident of the packaging mistake was dubbed “Staplegate” on the internet.
The pierced gaming machine was auctioned on eBay on Wednesday for an astounding $250,000, with the proceeds of the sale going towards Children’s Miracle Network Hospitals.
“How I thought about it was, ‘we got to get rid of them’,” Cohen explained, referring to how to dispose of the damaged Switch 2 inventory.
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Cohen further highlighted GameStop’s transformation since he joined the company in 2021. The company went from deep losses and debt to a shift in focus from gaming hardware and software to trading cards and collectibles. He referred to the retail video game giant’s decision to focus on the latter products as a more “durable” business model.
“We’re generating profits every single quarter now,” he said. “We’ve come a long way in a really short period of time.”
“It’s hard to appreciate what a piece of crap the business was when I joined the board and what was going on in the boardroom and management — but we’re making progress.”
The GameStop CEO also explained during the interview how Bitcoin could be used to fight inflation, and hinted at his company possibly investing more if the prices are right.
“I look at it as a hedge against inflation; a hedge against global money printing,” Cohen said. “We [GameStop] may buy more Bitcoin or not buy more Bitcoin — we’ll see what happens.”
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Cohen further reflected on GameStop’s notoriety as being a target of short sellers, due to the company’s volatility during the COVID-19 pandemic and the video game industry’s move towards prioritizing digital distribution.
“I was fascinated at how much hatred there was towards an investment in GameStop.” he said. “It’s unAmerican to bet against business — but it’s a free market. If you want to be on the other side, no problem.”
“I don’t really have much respect for short sellers, and someone who’s ultimately not smart enough to find someone successful, has to bet on someone’s failure. But if things work out, then they have to cover-so, let them short.”
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