GameStop shoppers, beware. It sounds like the retailer is on the cusp of inserting some sort of consumer-facing AI garbage into its shopping experience.
This comes from the company’s annual report, published a little over a week ago. It’s traditional in annual reports for companies to spend roughly half of the total page count outlining strategic risks to the company’s bottom line, so that investors can have a clear picture of what sorts of things might cause the stock price to crash or the company to go under. For most companies, a lot of these risk factors seem both obvious and unlikely. For instance, GameStop (like most other companies) has a paragraph in here about the risk of a natural disaster impacting its systems, personnel, or facilities. Gaming companies typically have a section about the cyclical nature of the games industry, as well as its volatility. That sort of thing.
But often, these sections can also provide interesting clues about what the company might see coming down the road or, in this case, be preparing to introduce itself. In GameStop’s annual report this year, it includes a brand new risk that was not present in past reports: artificial intelligence. Specifically, the risk of integrating it with its business, an activity that it acknowledges could cause “reputational harm, competitive harm and legal liability, and adversely affect our results of operations.” Sure sounds like tech you want to be using!
In the report, GameStop says that it “may begin using artificial intelligence and machine learning technologies to enhance certain workflows and processes used in our business, including certain customer-facing and operational activities,” strongly suggesting that it’s preparing to integrate AI of some sort in a way that both employees and regular customers of GameStop are going to end up engaging with. The paragraph then outlines a long list of risks or liabilities that would be introduced by this, including the risk of AI being inaccurate or biased, not performing as intended, or causing unintended consequences. It also suggests that other companies incorporating AI into their businesses faster and more efficiently is a potential risk, as is the prospect of GameStop using AI at all becoming controversial. And finally, the report notes there are legal risks associated with AI use, as laws and standards have not been fully developed yet.
Here’s a big, full wall of text from the report, for those interested:
We may incorporate artificial intelligence into workflows and processes, including customer-facing and operation activities, and challenges with properly managing its use could result in reputational harm, competitive harm and legal liability, and adversely affect our results of operations. We may begin using artificial intelligence and machine learning technologies (“AI”) to enhance certain workflows and processes used in our business, including certain customer-facing and operational activities. AI is still in its early stages, and the introduction and incorporation of AI technologies may result in unintended consequences or other new or expanded risks and liabilities. If the content, analyses or recommendations that AI applications assist in producing are, or are alleged to be, deficient, inaccurate or biased, such as due to limitations in AI algorithms, insufficient or biased base data or flawed training methodologies, our business, financial condition, results of operations and reputation may be adversely affected. In addition, if AI tools used in connection with our manufacturing and operations do not perform as intended, such tools could adversely affect our business and results of operations. Also, our competitors or other third parties may incorporate AI into their products and services more quickly or more successfully than we do, which could impair our ability to compete effectively and adversely affect our results of operations.
If our use of artificial intelligence becomes controversial, we may experience brand or reputational harm, competitive harm, or legal liability. There is uncertainty in the legal and regulatory landscape for AI, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome, could entail significant costs, and may restrict or impede our ability to successfully develop, adopt and deploy AI technologies efficiently and effectively.
It won’t be a shock at all if GameStop jumps on the consumer-facing AI wagon, just as it’s already attempted to profit off of NFTs and bitcoin to little real success. And incidentally, it looks like GameStop may already be implementing AI, behind-the-scenes at least. A marketing article from earlier this month revealed that GameStop has been using something called YOOBIC, which describes itself as “an AI-powered retail store operations platform,” ever since 2023. The article, written and published by YOOBIC itself, gushes about how great the transition has been, and at least some of what it does seems to just be innocuous, backend, data sorting stuff.
However, it also looks like GameStop has been beta testing something called “NEO Suite,” which YOOBIC bills as AI employee training tech. Just based on this article, it sounds like NEO Suite is fed training documents, and then generates news, tasks, modules, and quizzes to train employees, including AI-generated illustrations and a chatbot that can answer questions about matters such as uniform policies. My favorite bit of this is the paragraph in which YOOBIC talks about how complex California law regarding sales of used products is, suggesting that having an AI make sense of the confusing, variable, and jurisdiction-dependent laws would be better than having an actual legal expert on hand.
Keep an eye out, then, for any weird AI garbage infiltrating GameStop stores or websites. The good news is that if this is anything like the whole NFT thing, it won’t last long.
