Already perpetually living in the shadow of industry giant GameStop, video game retailer Game Crazy is about to get even smaller after this Wednesday’s announcement: their parent company, Movie Gallery, is filing for chapter 11 bankruptcy protection again – the second time in three years.

After a massive closing of approximately 200 stores last year, Game Crazy will be axing another huge swath of locations, bringing them down to only 250 remaining when all is said and done. Hollywood Video, GC’s former parent before their purchase by Movie Gallery in 2005, will keep 545 stores open while Movie Gallery will retain 1,111.

Movie Gallery says they plan to use the savings from the downsizing to “to continue normal operations” and “emerge with [a] new and sustainable business model” that will focus on a smaller number of more profitable stores. Kind of hard to imagine this happening for a chain that already suffered from near-invisibility in the retail mindshare as it was, if you ask me. I suppose we’ll see if they actually recover anytime soon, or if it will require a third bankruptcy – third time is supposed to be the charm, after all.

This story holds an especially bittersweet note for me, as I was employed by Game Crazy from 2005 until 2007, serving as my introduction to the retail side of the video game industry. My former store in New Haven, CT no longer exists – a victim of one of the previous rounds of store closings. Back then, the company had over 700 locations across the country. It’s kind of sad to see them fall this far.

Here’s hoping for a swift recovery for all those thankless, underpaid retail drones out there who’ll be affected by these closings.

[Source: Industry Gamers - via Joystiq]