I agree with johnmr12. The short interest as a % of float seems pretty aggressive given the fact that all long-term debt is retired, the recently initiated 2.5% dividend at 15 cents a quarter (well-covered by earnings), and a $500M buyback (which is roughly 15% of the value the $3.2B in outstanding shares). It doesn't seem like a good candidate for shorting given the balance sheet is in great shape. At the very least, it would seem like there's a good floor under the share price with downside limited by the buyback.
And with shorts obsessing over old Gamestop business being in jeopardy by digital or by Used games not being allowed on future hardware, Gamestop has plans in place to start participating in microtransactions starting with Diablo 3 and they have greatly expanded their electronics trade-in program with acquisition of buymytronics.com.
Gamestop can and is growing revenue streams outside of used games market. If they continue to do so then how are they doomed? With nearly $600 million cash on hand they have a lot of firepower to acquire more properties. That is something Blockbuster never had.
Plus, the roll out of Spawn Labs could be like rolling out Netflix streaming depending entirely on management's business model for Spawn Labs.