GME stock surged higher in afternoon trading on October 8, 2020, after the company announced a cloud partnership with Microsoft. Trading in GME stock was halted on the news.

GameStop Corp. (NYSE: GME) today announced that it has entered into a multi-year strategic partnership agreement with Microsoft Corp., further advancing its strategy to expand its physical and digital video game offerings, as well as enhance the Company’s retail technology infrastructure. With over 5,000+ retail stores worldwide and its world-class eCommerce platform, GameStop leverages its vast customer network, PowerUp Rewards, and omni-channel capabilities to deliver enhanced gaming solutions to its customers. Through this partnership, GameStop will standardize the Company’s business operations on Microsoft’s cloud solutions and hardware products to deliver rich new digital experiences to customers, creating the “ultimate gaming destination” for gamers in its vision to be the premier omni-channel customer access point for video game products.

The partnership includes enterprise and commercial elements.

  • Under this agreement, GameStop will standardize its back-end and in-store solutions on Dynamics 365, Microsoft’s portfolio of cloud-based business applications and customer data platform, empowering associates with integrated experiences across its business operations including finance, inventory, eCommerce, retail and point of sale. This will enable store associates the ability to access omni-channel insights about customer preferences and purchasing history, real time information on product availability, subscriptions, pricing, and promotions in order to provide a differentiated and personalized in-store customer experience.
  • Additionally, associates will be equipped with new Microsoft Surface devices that will transform the in-store experience and help unlock new retail experiences in the future. The mobility of Microsoft Surface will allow associates to move freely within the store footprint, meeting the needs of customers faster and more efficiently. Microsoft Surface devices have already been an important part of the digital modernization strategy for store management.
  • As part of its transformation, GameStop plans to roll out Microsoft 365 and Microsoft Teams to its stores, empowering more than 30,000 store associates with enhanced productivity and collaboration tools. With Teams, store associates will more easily be able to ask questions and share insights with one another, enabling them to provide a better customer experience. Associates will also benefit from enhanced security and identify management capabilities.
  • Following decades as an essential provider of the Microsoft Xbox gaming platform and services, GameStop has expanded its Xbox family of product offerings to include Xbox All Access, which provides an Xbox console and 24 months of Xbox Game Pass Ultimate to players with no upfront cost. GameStop and Microsoft will both benefit from the customer acquisition and lifetime revenue value of each gamer brought into the Xbox ecosystem.

George Sherman, GameStop’s Chief Executive Officer, stated: “This is an exciting day at GameStop as we announce the advancement of an important partnership that capitalizes on the power of our operating platform and significant market share in gaming to accelerate our digital transformation; drive incremental revenue streams; and over time, further monetize the digital world of gaming. Since joining the Company last April, we have been on a mission to evolve our strategy to take advantage of our undisputed leadership position in gaming. Clearly, GameStop is a top destination for an entire spectrum of gaming products, and we are excited about the opportunity to leverage our capabilities in support of the launch of the next generation of gaming consoles and expand our reach and connection to the worldwide gamer community through this partnership.”

“GameStop has become a popular destination for gamers to find their favorite video games, hardware and accessories, socialize with others in the community, try out new games, and get educated on the latest tips and trends,” said Matt Renner, President, US Enterprise Commercial, Microsoft. “By harnessing the power of Dynamics 365 and Microsoft 365, GameStop will be able to modernize its technology infrastructure and support store associates and fans in new and exciting ways. This partnership also provides GameStop with advanced retail management technologies that will drive operational efficiencies throughout its omni-channel platform.”

Phil Spencer, Microsoft, Executive Vice President of Gaming, added: “For many years GameStop has been a strong go-to-market partner for our gaming products, and we are excited about continuing and evolving that relationship for the launch of the Xbox Series X|S. GameStop’s extensive store base, focus on digital transformation in an omni-channel environment and expert gamer associates remain an important part of our gaming ecosystem, and we’re pleased to elevate our partnership.”

Jim Bell, GameStop’s Chief Financial Officer commented, “We believe Microsoft’s integrated retail technology platform will enable the continued development of our frictionless omni-channel digital environment, providing customers with an exceptional cross-channel experience for all things video gaming.” Mr. Bell continued, “By standardizing on Microsoft 365 and Dynamics 365, all accessed with Microsoft Surface devices at our fingertips, we will be able to create a better connection with our associates and provide them with powerful new tools to deliver rich engaging experiences to our customers while significantly enhancing our cross-channel view of inventory ensuring the most efficient delivery of products to our customers.”

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