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Toys ‘R’ Us Lost Huge Video Game Market Share Before Filing for Bankruptcy

Toys ‘R’ Us filing for Chapter 11 bankruptcy comes after the toy retailer lost relevance proportionate to their video game market share.

At the turn of the millennium, everyone wanted to be a “Toys ‘R’ Us kid,” and the children’s retailer was king. In 1999, the company was jockeying for the top spot in gaming retail — then, just a single, if strong, subset of their primary toy business.

But over the years, a former giant of the holiday season has found itself losing ground to enthusiast retailers like GameStop and the convenience of Internet retailers like Amazon, Steam, and console-specific online distribution. Today, Toys ‘R’ Us has less than 1% market share on the most popular “toy” market on the planet.

While chairman and CEO Dave Brandon tries to spin the catastrophic financial throes as the “dawn of a new era” for the company, most people cannot ignore the numbers: $5 billion in unpaid debts, reduced to $400 million following their filing. In the meantime, the embattled retailer has managed to secure another $3 billion in further loans.

But it may be difficult to feel much pity for a company that has, up until now, seemed so oblivious to their problems. Former chairman and CEO Gerald Storch went so far as to blame the games industry as a whole for their flagging support. He wrongly asserted that “It’s not that the internet is taking away our business, which is a popular story,” and blamed the retailer’s declining video game sales on “a lack of new products or innovations” by the gaming industry.

It is this willful disinterest in the changing culture of entertainment that seems to have fatally wounded the company. But unless this “new era” includes a drastically different vision for regaining relevance to consumers in a market that becomes more and more hostile toward brick-and-mortar retailers every day, Toys ‘R’ Us looks to be following Blockbuster Video down the road to obsolescence.

Follow Nate Church @Get2Church on Twitter for the latest news in gaming and technology, and snarky opinions on both.

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