For many readers, the name GameStop probably hasn't come up since the meme-stock frenzy of 2021. This largest U.S. game retail chain has no physical stores in Japan, but in a Bloomberg interview published on July 16, 2026, Chairman and CEO Ryan Cohen flatly declared that the decline in physical game software sales is "totally, totally irrelevant" to the company. He also said software now accounts for barely more than a tenth of the business, while collectibles make up over half. Yet a close reading of the quarterly report the company filed with the U.S. Securities and Exchange Commission (SEC) reveals that Cohen's own remarks overstated the reality.
What is GameStop, and the turning point in the meme-stock protagonist's journey
GameStop was founded in Dallas in 1984 as Babbage's. It was acquired by book retail giant Barnes & Noble in 1999, and the following year, in 2000, it merged with Funco — the operator of video game retailer FuncoLand — and changed its name to what it is today: GameStop, Inc., the largest game retail chain in the United States. It has no physical stores in Japan; domestic package game sales there are handled by existing electronics retailers like Yodobashi Camera and specialty game shops. Its store network has continued to shrink, with U.S. store count falling from 2,915 in February 2024 to 1,598 by January 2026 — a decline over just two years. Globally, the company operates only 2,206 stores in total, and it has been forced to pivot away from a business model centered on physical retail.
The GameStop name became globally known after the so-called meme-stock frenzy of January 28, 2021, when GameStop shares (ticker: GME) briefly spiked to $483 intraday. At the time, short interest reached roughly 140%, and the episode is often cited as the archetypal example of a "short squeeze," in which buying by retail investors squeezed institutional investors' short positions. Cohen is a co-founder of pet-supply retailer Chewy, who acquired a 9% stake in GameStop in August 2020 and joined the board in January 2021. He remained on the board even after the meme-stock frenzy subsided, and he now holds the reins of the company as Chairman and CEO.
Cohen's 2020 acquisition of a 9% stake in GameStop resembles the moves of activist investors who take stakes in struggling companies to push for reform. From his board appointment through the meme-stock frenzy to his current role as Chairman and CEO, the store count has kept falling — down to 1,598 over two years. The name recognition Cohen gained from the meme-stock frenzy, along with the cash pile built up from it, are weapons that ordinary activist investors don't have, and they are what have made possible bold moves like the recent eBay acquisition proposal.
The decline in store count is inseparable from the shift in how gamers primarily buy game software — from physical discs to downloadable distribution. Most new titles, whether for home consoles or handhelds, can now be purchased instantly through online stores, and foot traffic for buying new physical software has thinned out accordingly. GameStop's physical store network had built its strength on trading in and reselling used software, but the very market where that strength mattered has been shrinking — which is the backdrop to the pace of store closures.
Breaking down the $835.3 million: only collectibles grew
In the first quarter of fiscal year 2026, which ended May 2, 2026, GameStop's total net sales came to $835.3 million (roughly ¥135.3 billion, converted at ¥162 to the dollar as of July 18, 2026), up 14.0% year over year. Breaking this down, collectibles brought in $348.9 million (a 41.8% share), up 65.0% from $211.5 million (28.9%) in the same period a year earlier, making it the single largest category. Meanwhile, hardware and accessories came to $333.7 million (39.9%), down 3.4% year over year, and software came to $152.7 million (18.3%), down 13.0% year over year — both categories continuing to shrink. It was growth in collectibles that drove the overall 14.0% increase in sales, while the other two categories actually declined.
Operating income came to $143.3 million, a first-quarter record. One factor behind this improvement is thought to be the rising share of collectibles (a broad category spanning apparel, toys, trading cards, general merchandise, and card-grading services) — a category with relatively high gross margins. Net income came to $389.6 million, an all-time quarterly record, exceeding operating income by $246.3 million. According to the 10-Q, this gap is mainly attributable to $268.4 million in unrealized gains on derivative assets and $83.7 million in net interest income, which together pushed pre-tax income up to $506.4 million. In other words, the shift in sales mix toward collectibles is a factor boosting operating income, while the gap between operating income and net income stems mainly from gains on financial assets — a distinction that needs to be read separately from the underlying profitability of the business itself.
Retail company earnings are typically broken down into multiple product categories that differ in procurement structure and gross margin. In GameStop's case, the basic units are three categories — hardware & accessories, software, and collectibles (a classification distinct from its formal geographic reporting segments) — and tracking how the mix shifts quarter to quarter reveals which part of the business is actually carrying the company. What stands out most in this quarter's results is that the gap in growth rates has widened to a level well beyond the margin of error. Collectibles' 65.0% growth rate, set against declines of 3.4% for hardware and 13.0% for software, is a figure that clearly shows the center of gravity of the business shifting decisively in one direction.
Verifying "cards have overtaken games" with the numbers
In the Bloomberg interview, Cohen said, "Software today makes up less than 12% of the business, and collectibles make up over half the business." But according to the figures the company disclosed to the SEC, software's share was 18.3% — nearly 1.5 times Cohen's stated figure — while collectibles came to 41.8%, falling 8.2 points short of "over half." There's a discrepancy in both directions between what was said and what was disclosed, and notably, the discrepancy points the same way each time. In other words, Cohen described the transformation of the business as even more dramatic than the disclosed figures actually show.
Collectibles is a category that bundles together trading cards along with apparel, toys, general merchandise, and card-grading services. Meanwhile, if you add hardware & accessories ($333.7 million) and software ($152.7 million) together, you get $486.4 million, or 58.2% of total net sales — 16.4 points higher than collectibles ($41.8%), the single largest category on its own. Since hardware & accessories also includes mobile-related products and peripherals, it can't simply be equated with "game sales" — but even so, these two categories combined still account for a majority of total net sales. The headline claim that "cards have overtaken games" more precisely means that "collectibles became the single largest category" — GameStop has not disclosed what share of the $348.9 million in collectibles sales comes from Pokémon cards specifically.
Card-grading services are a system in which a third-party organization assesses a card's authenticity and condition and assigns it a grade; the higher the value of the card, the more of a premium a graded certification tends to command. GameStop includes this service within its collectibles category, signaling that it has begun treating trading cards as assets backed by grading and guarantees.
The gap between Cohen's remarks and the disclosed figures is probably better described as executive-style emphasis rather than outright exaggeration. That's because a 10-Q and earnings materials are statutory disclosure documents filed with the SEC, carrying accountability for numerical accuracy, whereas an interview is a venue for impressing upon listeners a sense of future direction. Still, the simplified narrative that readers take away — that "cards have overtaken games" — is bolstered by this kind of emphasis.
GameStop stock remains a name frequently discussed in retail investor communities, and a simple story like "cards have overtaken games" spreads easily. Coming right on the heels of the rejected eBay acquisition proposal, the timing of Cohen's remarks also serves to reinforce the company's turnaround narrative. Based on the disclosed figures, the transformation is indeed real and underway — but it hasn't swung as decisively in one direction as Cohen's remarks suggest. Whether you read this quarter's earnings starting from the numbers or from the statements will shape how you evaluate it.
The eBay acquisition proposal and crypto-asset policy: a full-scale shift toward a card economy
In May 2026, GameStop proposed acquiring eBay for $125 per share, with 50% of the consideration in cash and 50% in GameStop stock, for a total deal value of $56 billion (roughly ¥9.072 trillion at ¥162 to the dollar). The plan was to fund the cash portion with GameStop's own liquid assets plus an acquisition financing facility of up to $20 billion provided by TD Securities. But eBay's board rejected the proposal on May 12, calling it "neither credible nor compelling."
The move appears to have been an attempt to absorb eBay — a company with strength in trading cards and collectibles — and build a larger marketplace, but it never materialized as a formal acquisition. That said, GameStop has continued adding to its eBay stake since then, and an SEC filing dated July 18, 2026 revealed that its holding had reached 9.8%. This shows that GameStop has been pursuing business transformation on multiple fronts simultaneously, alongside its growing collectibles sales.
The proposed acquisition price of $56 billion is more than six times GameStop's $8.4 billion in liquid assets (cash and marketable securities). The fact that the company lined up an external financing facility on top of its own cash on hand reflects a stance that has no intention of staying confined within the bounds of retail.
Just after the acquisition proposal, on June 2, 2026, the board approved a $2 billion share buyback program. The company's freely available cash and marketable securities stood at $8,368.1 million as of May 2, 2026 (note that in July it also settled certain eBay-share derivatives in physical shares, so the most recent balance may differ from this figure). Separately, $983.3 million is tied up as collateral for derivative transactions; since the total cash-and-equivalents balance GameStop discloses includes such restricted amounts, one cannot simply treat the combined total as freely usable cash on hand. As an investment policy, the company also permits investment in crypto assets such as Bitcoin, and the 2025 convertible notes it issued explicitly stated that a portion of the proceeds would be used for Bitcoin acquisition.
The company is sitting on an amount of cash unusual for a game retailer, and it is exploring how to deploy it through both share buybacks and investment. This buyback can be seen as an extension of the string of "non-core revenue source" pursuits the company has pivoted through since the meme-stock frenzy — crypto-asset investment, the shift in weight toward collectibles, and the eBay acquisition plan. Having just had its growth-investment bid for eBay rebuffed, the company has now pivoted to share buybacks — a move that can be read as a signal of a shift toward returning excess capital to shareholders rather than hoarding it.
The move away from packaged sales is not unique to GameStop. Sony announced on July 1, 2026 that it will end production of physical discs for new PlayStation titles starting January 2028. The shift to digital distribution is advancing across the industry as a whole, and this structural change is also part of the backdrop behind GameStop's 13.0% year-over-year decline in software sales. Even allowing for exaggeration, Cohen's read of the situation is consistent with the industry's overall direction.
Who benefits, and what isn't being said
The party that benefits most from this shift is GameStop itself. The company's disclosures show that collectibles as a whole is a category with a relatively high gross margin, meaning that as its share of sales rises, overall profitability improves (though the cost of goods and gross margin for trading cards specifically are not disclosed). Card resellers and users of grading services also stand to benefit, as long as GameStop continues to function as a sales channel via its physical store network. On the losing end are the small and midsize game retailers whose business has been built around packaged software, along with core gamers who insist on collecting physical discs. The fact that the store count has fallen to 1,598 over two years means, for the latter group, that their range of options is simply shrinking.
There are two things the disclosed materials don't tell us. One is the breakdown of that $348.9 million in collectibles. GameStop hasn't revealed exactly how much of that comes from Pokémon cards specifically. Cohen's claim that they're the "single most popular item" in stores comes without a dollar figure to back it up.
The other unaddressed point is the nature of trading-card demand itself. Cohen didn't address whether this is structural demand or a temporary boom. It has been pointed out that the trading card market is prone to speculative demand from resellers, which can push up prices — and there's no guarantee that this quarter's growth, achieved amid such conditions, can be sustained once the market cools.
The fact that growth in the collectibles category is now driving GameStop's earnings also means, conversely, that swings in card market prices will directly shape the company's future performance. Whereas demand for consoles and software tends to rise and fall gradually depending on the presence or absence of new title releases, trading card prices can swing sharply depending on demand in the resale market. GameStop's profit growth is also, in effect, a bet placed on a highly volatile market.
What Japanese readers should watch is a card economy in a country with no stores
What is most propping up GameStop's sales growth is the collectibles category, and at the center of its in-store popularity is a trading card born in Japan. The secondary market for the Pokémon character IP — created by Nintendo, Game Freak, and Creatures, with international expansion handled by The Pokémon Company (founded in 1998, renamed to its current name in 2000) — has begun to shape the earnings of a retail company on the other side of the Pacific. The reported fact that Cohen called it the "single most popular item" in stores underscores just how strong this connection is, though GameStop has not disclosed the dollar breakdown of collectibles overall. If international Pokémon card prices rise, that is highly likely to spill over into the domestic collector market in Japan as well — so even though GameStop's earnings may look like events happening in a distant country, in terms of price formation, they're looking at a market that's contiguous with Japan's own.
Whether this shift turns out to be a passing boom or settles in as a structural revenue source will become clear as we see how far the growth rate in collectibles decelerates from 65.0% in the coming quarters. As long as hardware & accessories and software combined continue to account for a majority of total net sales, GameStop will remain, at its core, a game retailer. Which way this balance tips will likely be told first by the next earnings figures disclosed — rather than by anything Cohen says.