News of the development comes after Capcom refused to ship retail copies of Street Fighter x Tekken and Asura's Wrath to GAME.
According to The Independent, GameStop is keen on expanding its business in Europe by taking over the 291 stores in Spain and Portugal.
GAME shares are now closed at 4.6p.
It was revealed last week that GAME could lose up to £2.5 million with the absence of Mass Effect 3 on shelves, along with the announcement that future EA titles FIFA Street 3, Tiger Woods 13 and The Sims 3: Showtime will not be stocked.
In February, the company stated that 35 GAME stores will be shut.
> GAME shares plummet by 90% in one year