GameStop buyers beware. It appears the retailer is about to insert some sort of consumer-facing AI garbage into its shopping experience.
This comes from the company’s annual report, released just over a week ago. It is traditional in annual reports for companies to devote about half of the total pages to describing strategic risks to the company’s bottom line, so that investors can get a clear idea of the kinds of things that could cause the stock price to collapse or the company to go bankrupt. For most businesses, many of these risk factors seem both obvious and unlikely. For example, GameStop (like most other companies) has a paragraph here about the risk of a natural disaster affecting its systems, personnel, or facilities. Gaming companies typically have a section on the cyclical nature of the gaming industry, as well as its volatility. That sort of thing.
But often these sections can also provide interesting clues about what the company might be considering in the future or, in this case, preparing to present itself. In this year’s GameStop annual report, it includes a brand new risk that wasn’t present in previous reports: artificial intelligence. Specifically, the risk of its integration into its business, an activity that it believes could cause “reputational harm, competitive harm and legal liability, and negatively affect our results of operations.” Sure, this sounds like technology you want to use!
In the report, GameStop says it “may begin using artificial intelligence and machine learning technologies to improve certain workflows and processes used across our business, including certain operational and customer-facing activities,” strongly suggesting that it is preparing to integrate some sort of AI in a way that GameStop employees and regular customers will eventually engage with. The paragraph then describes a long list of risks or liabilities that would arise, including the risk that the AI is inaccurate or biased, does not work as intended, or causes unintended consequences. It also suggests that other companies integrating AI into their businesses more quickly and efficiently is a potential risk, just as the prospect of GameStop using AI becomes controversial. Finally, the report notes that there are legal risks associated with the use of AI, as laws and standards are not yet fully developed.
Here’s a large full wall of text from the report, for those interested:
We may integrate artificial intelligence into workflows and processes, including customer interaction activities and operational activities, and difficulties in properly managing its use could result in reputational damage, competitive harm and legal liability, and negatively affect our results of operations. We may begin to use artificial intelligence and machine learning (“AI”) technologies to improve certain workflows and processes used in our business, including certain operational and customer-facing activities. AI is still in its early stages, and the introduction and integration of AI technologies may result in unintended consequences or other new or increased risks and liabilities. If the content, analytics or recommendations that AI applications help produce are, or are alleged to be, deficient, inaccurate or biased, for example due to limitations of AI algorithms, insufficient or biased master data or faulty training methodologies, our business, financial condition, results of operations and reputation could be harmed. Additionally, if the AI tools used in our manufacturing and operations do not perform as intended, these tools could negatively impact our business and results of operations. Additionally, our competitors or other third parties may integrate AI into their products and services more quickly or more successfully than we do, which could harm our ability to compete effectively and negatively impact our results of operations.
If our use of artificial intelligence becomes controversial, we could suffer brand or reputational harm, competitive harm or legal liability. There is uncertainty in the AI legal and regulatory landscape, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI may be burdensome, result in significant costs and may restrict or hinder 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 once attempted to do. profit from NFTs And bitcoin with little real success. And incidentally, it appears that GameStop is already implementing AI, at least behind the scenes. 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,” since 2023. The article, written and published by YOOBIC itself, gushes about the scale of the transition, and at least part of what it does appears to be just harmless data sorting.
However, it also appears that GameStop has been beta testing something called “NEO Suite,” which YOOBIC touts as AI employee training technology. From this article, it appears that NEO Suite is fed training materials and then generates news, tasks, modules, and quizzes to train employees, including AI-generated illustrations and a chatbot that can answer questions on topics like uniform policies. My favorite part of this paragraph is the paragraph where YOOBIC explains how complex California law regarding the sale of used goods is, suggesting that it would be better to have an AI to understand the confusing, variable, and jurisdiction-dependent laws rather than having an actual legal expert on hand.
So keep an eye out for any weird AI garbage creeping into GameStop stores or websites. The good news is that if so something like the whole NFT thingit won’t last long.