GameStop’s Viral Moment: Turning a Marketing Mess into a Charity Auction

It could have been a marketing mess. At the release of Nintendo Co.’s new console last month, some GameStop Corp. customers found their devices’ screens ruined after an employee forcefully stapled receipts to the boxes. Instead, the video game retailer transformed the blunder into another viral moment by selling one of the damaged units for about 500 times its retail price in a charity auction.

The punctured Switch 2 fetched $250,000 on eBay Wednesday, compared to $499.99 for a pristine one with Mario Kart included in stores. The lot also includes the black stapler and offending staple, “carefully extracted and preserved.”

The Incident: A Marketing Opportunity

The controversy occurred at GameStop’s Staten Island, New York location during the midnight launch of the Switch 2 on June 5. Multiple devices were apparently damaged by an “overenthusiastic employee” who stapled the receipts on to the boxes too aggressively, according to the company.

The slip-up quickly trended online as some customers began to post frustrations about their damaged consoles. GameStop quickly replaced the Switch 2s, but the meme-savvy retailer leaned into the snafu with humor, eventually putting the infamous stapler and first console it punctured up for auction. The proceeds will go to Children’s Miracle Network Hospitals.

GameStop’s Strategy: From Retailer to Collector’s Destination

The auction is the latest online phenomenon for GameStop, which was at the center of the meme stock craze in 2021, and emblematic of its shift from a retailer of video games to a store more focused on collector’s items like trading cards.

“Basically, it turned into a collectible,” Chief Executive Officer Ryan Cohen told CNBC in an interview on Tuesday about the incident, dubbed “Staplegate” online.

A Unique Auction: Certificate of Authenticity and Bonus Items

The auction also includes a certificate of authenticity from GameStop’s Cohen that claims the now-refurbished Switch 2 “is the first known console to be officially stapled during a product launch by GameStop” and describes the stapler as “a retail legend.”

As the bidding began, Cohen said that he would include his underwear if it reached six figures and that he would personally fly the winner out to Miami to deliver the bonus item over lunch at McDonald’s if the price hit seven figures.

GameStop’s Future: Focusing on Collectibles and Community

The spectacle is indicative of GameStop’s strategy to become a destination for collectors and pursue community-oriented initiatives, leveraging its passionate base of retail investors. The company is focusing on growing its trading card business, such as Pokémon, while also investing in cryptocurrencies like Bitcoin.

Revenue from collectibles rose 55% in the first quarter compared to last year, while sales of hardware and software fell around 30% each.

Conclusion

In conclusion, GameStop’s viral moment has shown that even a marketing mess can be turned into a successful charity auction. The company’s ability to lean into the snafu with humor and create a unique auction experience has generated significant buzz and revenue. As GameStop continues to shift its focus towards collectibles and community-oriented initiatives, it will be interesting to see how the company evolves and grows in the future.

FAQs

Q: What happened at the GameStop store in Staten Island, New York? A: An employee forcefully stapled receipts to the boxes of Nintendo Co.’s new console, damaging the screens of multiple devices.

Q: How much did the damaged Switch 2 sell for in the charity auction? A: The punctured Switch 2 fetched $250,000 on eBay.

Q: What is GameStop’s strategy for the future? A: GameStop is focusing on growing its trading card business and investing in cryptocurrencies, while also pursuing community-oriented initiatives and becoming a destination for collectors.

Q: How much did revenue from collectibles rise in the first quarter compared to last year? A: Revenue from collectibles rose 55% in the first quarter compared to last year.