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The Camelot GameStop Chronicles Part 3: Poor Business Decisions, the Three Stage Plan, and Imminent Bankruptcy

Camelot GameStop

A YouTuber by the name of Camelot331 has been covering accusations of immoral and illegal activities conducted by GameStop employees and corporate staff for over a year. This is his story.

Our prior articles discussed Camelot’s first video (detailing many suspicious activities he allegedly saw when working at GameStop), and the accusations made by others who came forward.

These included mistreating and defrauding customers, mistreating staff, and firing staff under false or dubious pretenses.

Camelot continued to produce videos, fueled by current and former GameStop staff providing him information on their own experiences [12345678910111213141516171819202122232425262728293031323334353637383940].

Due to the sheer number of accusations, we will be categorizing the allegations based on their nature. Some of these allegations do fit into multiple categories, some that will be featured in later articles.

This article will focus on accusations of Poor Business Decisions, Other Deceptive Practices, and Signs of Imminent Bankruptcy and/or Closure (along with “The Three Phase Plan,” and “Tech Trades for Cell Phones”). These include:

 

Poor Business Decisions

  • Increasing the price of the PowerUp Pro loyalty card, and removing the 10% discount on used games- replacing it with a monthly $5 off coupon.
  • GameStop allegedly began to focus on cheaply made merchandise with large mark-ups, as games and consoles did not produce as much revenue. A brand new PlayStation 4 would allegedly only make GameStop $4 to $6 in profit.
  • GameStop also aimed to convert many of their stores into places where customers could “hang-out”, focused around retro video games and tabletop games. This would mean less shelf space for games, and almost a focus for customers to do anything except buy product of any kind.
  • One source in a video in January 2020 claimed the Circle of Life policy was “coming back in a huge way… If it was ever really gone. We will be getting terminated if we don’t hit a certain goal in each category.” Camelot revealed he had obtained a corporate document, detailing GameStop’s plans for 2020 (below).

GameStop

 

Other Deceptive Practices

GameStop allegedly defrauded investors by stating their used games were more profitable than they actually were. One source told Camelot that game trade-ins were “hardly sold at all.”

The Refurbishment Operations Center (ROC) would allegedly remove the shrink wrap on half a shipment of new games, to sell them as fake used copies along-side brand new titles.

Camelot estimates that if GameStop stated they made $200 million in used game sales, they would have actually made $20 million.

On September 26th, Camelot claimed via Twitter that “Gamestop has a new program where they are forcing their associates to take the store tablet, go into other stores and competitors to convince customers in these stores to come to Gamestop instead for trades and services. That’s textbook solicitation.” After this, others reached out to Camelot to confirm it.

 

Signs of Imminent Bankruptcy and/or Closure – The Three Phase Plan

In addition to the mistreatment of staff by minimizing pay, attempting to get staff fired, and an ever slipping stock-price, Camelot claims that around May 21st, 2019, that GameStop had not repurchased their own stock since their last earning’s report. He proposed this to mean it would soon be the end of the company (along with a then record low stock value).

Camelot also proposed across several videos that the new senior corporate staff would attempt to maximize profit for around 18 months, and then leave or even liquidate the company after gaining the most profit they could. This is what Camelot refereed to multiple times as “Endgame”.

Camelot would later claim “the entire executive team” were buying company stocks to increase the stock price, in violation of not only GameStop’s own policies, but insider-trading laws.

GameStop allegedly fired and let-go of numerous employees as part of a “three-phase” plan over several months. Camelot’s informant would tell him of these plans before the staff themselves knew they were to be fired.

Phase One: GameStop fired a third of their District Managers and Regional Leaders on the same day (later confirmed as around 50 to 60), a week before staff were due to receive a raise.

Phase Two:“company that works close with GameStop” told Camelot that GameStop was axing over-half the “high-level” corporate staff.

GameStop allegedly explained that “anyone considered to be not strategic, or absolutely vital to GameStop making profit will be terminated [without notice] on or around the 21st August [2019].” This would include anyone from Marketing, IT, Accounting, Operations, and more.

Camelot later received confirmation that this had occurred, and employees who had worked for years at GameStop had no prior warning. Many learned of it through Camelot’s video. The informant in that case even claimed that corporate staff laughed at the fired employees as they were escorted from the building “like criminals.”

Phase Three: At the end of Q4, 2019, GameStop allegedly planned to close over half of their 4,400 stores in the US, down to 2,000. Less profitable stores would be prioritized, with stores making $800,000 to $1 million a year would seemingly be OK. Even then, half of the remaining stores would be converted to retro and tabletop games as aforementioned.

During the annual Store Manager conference, corporate staff allegedly revealed some stores would be converted, as aforementioned. Later, District and Regional Managers “looked shaken” when they returned to work.

They had allegedly learned that District Managers had to come up with a list of Associates (part-time store staff) and Managers they wanted to keep after Phase Three.

Camelot theorizes that since there will be more District and Regional Managers than required, they too would soon be terminated after or as part of Phase Three. He further proposes that anything from half to 70% of District and Regional Managers would lose their jobs, or even the whole role of District Manager becoming defunct.

In a later video, a District Manager would confirm that the District Manager’s lists were finalized on November 20th, 2019, and that it would come into effect in 2020.

A Supervisor from the ROC claimed to Camelot he was asked daily by employees if their jobs were safe. The Supervisor feared telling them anything other than that their jobs were safe, fearing their own employment could be terminated.

Numerous websites [1, 2, 3, 4, 5, 6, 7] would report GameStop closed 180 to 200 stores in September 2019. GameStop began operations to close 300 stores in Scandinavia in November 2019. Camelot proposes these were all of the GameStop stores in Scandinavia.

In a video on December 8th, 2019, Camelot stated he had received “more messages than ever before” (later revealed as around 40), all roughly on the same day. These came from employees, ranging from store Associates to corporate-level, revealing that stores were closing faster than ever before.

A supervisor also claimed that their superior told them “Gamestop is relying heavily on this holiday season to stay afloat. If it don’t [sic] perform well enough. Then it’s over.” GameStop’s 2019 Holiday sales declined by 27.5%.

A corporate source also claimed that GameStop were planning to close one or two stores per district after Black Friday, and continuing to do so until the end of January 2020, “then rinse and repeat for a couple months.” 

If true, this would result in 300 to 500 stores per month month closing after December 2019. The acceleration after December was allegedly to avoid being able to issue returns, or transactions with gift cards from those stores.

This was to continue into Q2 2020, closing around 2000 stores in total. It seems as though poor Black Friday sales motivated Gamestop to enact “Phase Three” early.

  • At least two stores that allegedly made over $1 million USD in a year were still closed.
  • Another employee claimed 72 stores in their district were being closed before January 1st, 2020. Another district were closing 80 stores.
  • One source claimed employees were finding out they no longer had jobs with as little time as the day before.
  • A third-party source claimed to Camelot that a Store Manager was offered $10,000 to leave, or be demoted. Then the Store Manager was blamed for their staff not making enough profit. During a conference call with other Store Managers, they were allegedly told to sell more if they did not wish the same to happen to them. Camelot claims while he worked at GameStop, a store in his area closed, and that Store Manager was given the same offer.

 

Signs of Imminent Bankruptcy and/or Closure – Tech Trades for Cell Phones

Camelot also proposes poor financial performance is why GameStop were allegedly selling traded-in cell phones to Chinese companies, and it is their “highest priority,” to help increase the company’s earnings reports for shareholders.

During a video in October 2019, one individual claimed their superiors were asking them to “go to neighboring cell phone stores, meet the managers and ask if they would send people who come in asking if they buy phones and tablets to us instead of anywhere else.”

A video in December 2019 had one employee claim that if they did not get at least five phones a week, they were “put on coaching. 2 weeks the SL [Store Leader] goes on coaching separately. 3 weeks and the SL is fired.”

A later video had a Senior Game Advisor claim that 5 was the minimum (later supported by a claim from another employee), and that those who did not get 10 cell phone quotes a day were punished.

An Assistant Store Leader claimed they had to log when they told customers about the “tech trades,” including who was involved, and if it resulted in a quote. This was despite the laws against pawning for money in the state that employee was based in.

This was heavily checked via both internal security cameras, and nightly emails sent to the District Manager with daily and weekly quotes and trades.

Camelot even claims in one video that the tech trades are the only thing “keeping GameStop afloat.” One whistleblower from the ROC (a senior within the ROC who had given information to Camelot before) claimed that GameStop were doubling down on the practice around late January 2020.

“Tech trades are only here to get us to the next consoles,” one head at the ROC was allegedly heard saying. “If we can make it that far.” 

The whistleblower also shared Camelot’s opinion that the end was near for GameStop. While staff at the ROC expected a “huge severance,” the source claims to know from meetings that they will not- even if they have worked there for several years.

Another source claimed that they would “get drilled” by their District Manager if they did not achieve their goals, and their store had the goal of 15 trades per week.

Store Managers failing to achieve the goal in one week were allegedly warned. After two weeks, they were allegedly issued a first and final warning.

After three weeks of under-performance, they were allegedly fired with “no questions asked,” and the termination reason cited as insubordination. This has occurred to two Store Managers the source allegedly knew, despite working at GameStop for over a decade.

Camelot confirmed that during GameStop’s Circle of Life business plan, employees were also fired for not achieving those goals within three weeks. Again, this was in-spite of any past performance.

A later video had one employee claimed it happened to them, with their District Manager saying they should have gotten friends and family to trade in their phones if they “really cared” about keeping their job. That employee had already traded-in their own phone to attempt to reach their goal.

In one video, Camelot made a throw-away comment, stating GameStop were getting cell-phones to send to Chinese companies, and “not go bankrupt in two months.”

He elaborated on that claim in a video in December 2019, along with a corporate source showing a corporate letter (below) and other claims from other employees.

Employees are allegedly encouraged to buy cellphones from customers in their stores. Those who called the store would be told how their phone could be worth up to $500. In actuality “their particular model” was usually worth a lot less. The cell phones are then allegedly sold to Chinese companies at a higher price.

A heavily cropped part of an alleged internal document showed that employees were expected to reach out to not just cell phone retailers, but to “reach out to the community”- presenting the offer in high schools, colleges, club sports, and community boards.

Camelot points out that if an employee is not specifically paid to leave the store, it can be deemed time-card fraud (either for leaving while on the clock, or clocking out of your shift).

That same corporate source would later claim the details from a “closed door event.” They claimed to affirm Camelot’s suspicions, and that the tech-trades were in fact “the only thing left keeping [GameStop’s] head above water.”

They cited an example where they would allegedly pay $10 for a new iPhone with a broken screen, fix the screen for $10, and sell it for $150 overseas.

 

Accepting Stolen Phones in Tech Trades

In one video in early February 2020 a source claimed the tech trade goals were getting “extremely intense.” This including accepting phones that were blatantly stolen from the same man (about three every day, brand new in box and never turned on).

When that individual hit his trade limit, he came into the store with “random people” and used their I.D’s for trade ins. The customer would even joke “I didn’t pay for them so it doesn’t matter what you give me,” and it was the “easiest money I’ve ever made.”

When the source allegedly contacted their District Manager and later their Loss Prevention Manager, they both said to keep taking them.

There were additional stories from other employees claiming they had to take property they believed was (or turned out to be) stolen:

  • Camelot claimed while he worked at GameStop, he was told to accept game consoles and controllers they felt were blatantly stolen.
  • One employee of eight years was allegedly fired for refusing to take phones they felt were “obviously” stolen. One of the individuals in a couple had their mugshot appear online for theft, and later attempted to trade phones in (again, brand new and in the box). When the employee refused, the District Manager in the store allegedly “flipped out.” The District Manager also allegedly stated they would have taken them, even after seeing the online mugshot. “He said that it didn’t matter that they were stolen we can’t refuse them because we need to beat our tech goals and we couldn’t prove that we knew they were stolen at the time of the trade.” After an argument, the employee was fired on the spot.
  • One source claimed a Store Associate was fired for accepting stolen tech trades. While their superiors allegedly told them “You can’t prove it so take it,” one of the people who traded in stolen goods was later caught by the police. During the police’ inquiry, the District Manager fired the Associate “instantly.” When the source told the District Manager that they had been told by them to take anything, the District Manager allegedly replied “tech trades are tough so we are going to have issues along the way.” The source expressed concerns that GameStop were “using kids that are 18 and 19 as scapegoats to take in stolen goods” which can be a felony, and illegal in most instances (if it was known, which GameStop takes advantage of- so Camelot claims).

Camelot then shared one story from a District Manager, claiming a Regional Manager in a meeting told them to “take all tech trades regardless of where thy come from.”

When other District Managers in the meeting took issue, the Regional Manager allegedly said “if the associate doesn’t physically see the phone being stolen then they need to take it.” When they proposed only taking one phone per customer, the Regional Manager “got livid,” and was “very vocal about taking everything.”

When asked when if an Associate should still accept the trade when they know phones are stolen (sealed in a never opened box in large quantities), the Regional Manager allegedly said yes.

When it was pointed out that was illegal, the Regional Manager allegedly laughed and said “don’t be stupid. They can’t prove it so don’t worry.” The source also claims the Regional Managers get their orders from the “tops of the company,” but even they were telling employees to “keep [their] options open because Gamestop won’t be around forever.”

Camelot shared a similar anecdote from when he was working at GameStop, where he was allegedly told by his District Manager to accept eight brand-new PlayStation 4 controllers.

This was in spite of some of their boxes being partially damaged from what appeared to be a box-cutter, and from a customer who looked like they were a drug addict.

 

Signs of Imminent Bankruptcy and/or Closure – Sale of New Consoles Needs to Exceed to Survive 

The corporate source also told Camelot that investors were allegedly being told that the new console cycle will turn the company around.

Continuing, the source claims that if GameStop does not exceed its predicted goals with the sales of new consoles “by a big margin” (the PlayStation 5, and Xbox Series X), then GameStop will “file Chapter 11 Bankruptcy. Sell everything and try to survive in a much smaller capacity.”

The corporate source claimed GameStop “didn’t get even close” to their sales goals with the last console cycle. While the PlayStation 5 and Xbox Series X are planned to go on sale Holiday 2020, the sales goals are described as the whole life-cycle of the console.

As such, GameStop’s bankruptcy (if it does happen) could occur anywhere between 2021 and 2028 (as the PlayStation 4 and Xbox One have both been out for seven years). Though later comments by the source may indicate this will come in 2021.

The need to focus on the newest consoles was allegedly planned since early 2019, with store closures being part of the process to keep the company alive until that stage.

Less senior corporate staff had only been told of this around late January 2020. Those staff were also told to “form backup plans.” The corporate source stated “2020 is indeed the last year of GameStop.”

Even if GameStop were to sell over 150% of their sales targets for the new consoles, the source claims this may take the company to mid 2020 “but not likely.” This is not including the fact that the Coronavirus is likely to hinder production of many electronics, including new game consoles.

In one video on February 6th, 2020, an employee claimed that 30 preorders had been cancelled at a store the same week as Camelot’s video on the bankruptcy plan.

Camelot had encouraged viewers to cancel their preorders on numerous occasions (such as to make sure they get their money back should GameStop suddenly go bankrupt), but also so the consumer could “vote with their wallets.”

 

Other Signs of Imminent Bankruptcy and/or Closure 

Black Friday 2019 was allegedly disastrous for many GameStop stores, where one store did not even achieve 10% of its goals. The Store Manager was told by their District Manager that their store “better get [their] shit together“.

Two other anonymous employees claimed similar stories to Camelot. One employee allegedly had their hours cut, and had to work alone the following weekend due to the poor performance, causing them to quit. That store’s District Manager allegedly had encouraged adding items onto transactions without the customer’s knowledge.

Another Store Manager claimed their store “didn’t even do 10k in sales,” and that an alleged email (presumably from corporate) “forced” them to upsell and “be shady.” Rather than signing off on it, they quit instead.

Yet another employee claimed their was a corporate email, encouraging employees to recommend “1-2 additional items for every guest,” along with the “5 behaviors” to encourage this “minimum expectation.” 

Camelot felt this, combined with the signature, meant those who did not do the minimum expectations would be fired. Camelot claimed “a dozen” people had contacted him, stating they had walked out instead of signing this contract.

 

In short, these accusations combined with prior articles include accusations of:

  • Fraud (against customers, employees, and investors)
  • Ignoring and outright encouraging staff to partake in shady practices (including solicitation)
  • Poor business decisions
  • Poor treatment of staff while making unreasonable demands
  • Slashing staff pay
  • Senior corporate staff attempting to maximize profit before quitting
  • Attempting to or succeeding firing staff on unjust or falsified grounds

Less senior staff such as District Managers, Store Managers, and part-time employees were also accused of defrauding customers, gender discrimination, race discrimination, keeping staff who were defrauding customers, and making false police reports.

As stated in one of his videos, Camelot has no praise for senior staff or GameStop as a whole.

“GameStop does not want to treat customers right. They do not want to treat their associates right, they do not want to treat their leadership team right. All they want to do is- the top executives soak up whatever profits they can for a quarter or two, and then they all leave. That’s it. GameStop deserve to be gone.”

 

This is far from the worst of these accusations. Join us next time for The Camelot GameStop Chronicles Part 4: Accusations of Sexual Harassment.

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Ryan Pearson

About

Taking his first steps onto Route 1 and never stopping, Ryan has had a love of RPGs since a young age. Now he's learning to appreciate a wider pallet of genres and challenges.