In 1986, B. Dalton opened the first Software Etc., which sold video game and entertainment software products. Software Etc. initially began operating in B. Dalton book stores but was spun off in 1987 and began focusing on standalone stores. In 1994, Software Etc. successfully merged with competitor Babbage's. In 1996, NeoStar Retail Group Inc., then owner of Software Etc. and Babbage's, filed for Chapter 11 bankruptcy and put the two chains up for sale. By November, NeoStar had failed to find a buyer and announced that all 707 stores owned by the company would close in the next year. By November 26, the plan to close the stores was halted, as NeoStar's assets were sold to an investor group led by retailer Leonard Riggio. In 1999, the newly formed Babbage's Etc. launched the GameStop chain and was sold to Barnes & Noble. The sale reunited the Software Etc. chain with its original parent company, B. Dalton. Barnes & Noble purchased Funco, Inc. in 2000 and merged Babbage's Etc. to become a wholly owned subsidiary of Funco. Funco changed its name to GameStop, Inc. and became independent from Barnes & Noble by 2004. Since then, GameStop has phased the Software Etc. name from most stores.
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