EB Games has transferred almost $49 million in dividends and related payments to its US parent company, GameStop, despite reporting $11.3 million in losses over the past two years, shutting down its entire New Zealand business, and delaying payments to suppliers for months — raising growing concerns that cash is being prioritised for offshore shareholders over the financial stability of the local operation.
The Australian video game retailer is under increasing strain as the market for physical games and consoles continues to contract, driven by the rapid shift toward digital downloads, subscription services and cloud-based gaming. Rising component costs expected this year are also set to place further pressure on already weakened hardware sales, compounding challenges for traditional retailers.
Problems affecting console and hardware sales are now flowing through to the gaming accessories market, with suppliers reporting declining volumes as fewer consumers purchase new physical games or devices. Industry observers say this shift has significantly reduced foot traffic and in-store purchasing, eroding the relevance of specialist retailers such as EB Games.
The pressure has already resulted in the complete shutdown of EB Games’ New Zealand operations, with all stores set to close by January–February 2026. Staff have been notified and liquidation sales are currently underway, drawing crowds of gamers seeking discounted stock. EB Games has attributed the closures to what it describes as multimillion-dollar losses, saying the business is no longer commercially viable in that market.
The closures follow a sharp slump in revenue, with reported sales falling dramatically from FY2024 to FY2025. At the same time, multiple suppliers have told ChannelNews they are experiencing payment delays of up to three months, raising concerns about cash flow management and creditor exposure.
Despite these pressures, EB Games continues to operate more than 330 stores across Australia, though the long-term viability of large-scale physical game retail is increasingly being questioned. Consumer complaints relating to stock availability, returns, service wait times and product issues have also appeared across consumer watchdog forums and complaint platforms, adding further strain to the brand.
EB Games is wholly owned by US-based GameStop, which is itself undergoing one of the largest retrenchments in its history. GameStop is closing 470 stores in the United States this year, following 590 closures in 2024, meaning more than 1,000 US stores will have shut in just two years as the company aggressively shrinks its brick-and-mortar footprint.
Financial filings show that while the Australian business has recorded losses, it has still transferred $48.9 million in dividends and payments to its US parent over the same period. This has occurred even as revenues declined, suppliers waited months to be paid, and the New Zealand business was wound down. GameStop, meanwhile, is sitting on substantial reserves, including more than A$12.8 billion in cash and hundreds of millions of dollars in Bitcoin holdings.
EB Games has paid little, if any, corporate tax in Australia in recent years and has not disclosed whether the large outflow of funds offshore has affected its ability to meet local creditor obligations. While such transfers are legal, some observers are questioning what financial reserves would remain in Australia should the business face a sudden failure. 
Several industry analysts have suggested that tightening supplier payment terms and the closure of the New Zealand operation could further bolster dividends to the US parent company in the current financial year.
GameStop’s share price has remained volatile as investors weigh aggressive cost-cutting against persistently weak revenue trends. While the company has reported improved net income in recent quarters — largely driven by store closures and reduced operating costs — revenues continue to decline, underscoring the structural challenges facing physical retail in the gaming sector.
Industry observers told ChannelNews that the New Zealand closures reflect a broader global decline in physical game retail, with digital downloads, online platforms and subscription models now dominating consumer behaviour. Competing retailers such as JB Hi-Fi have increasingly capitalised on this shift, gaining greater influence over supply and product allocation — most recently highlighted during the rollout of Nintendo’s new Switch hardware, where specialist retailers were sidelined.
With falling revenues, mounting supplier pressure, the closure of an entire country operation and increasing competition from diversified retailers, serious questions are now being raised about the long-term viability of EB Games’ traditional retail model in Australia — and whether its footprint will continue to shrink in line with its US parent.
