GameStop has announced another quarter of large losses, as the company continues to struggle in a market that is rapidly shifting to a digital format. The announcement continues the trend of bad news for GameStop's shareholders, as the company's stock price continues its steady decline.
GameStop's announcement included a loss of $415.3 million last quarter, with multiple categories experiencing significant decreases in sales. Chief among them was a 41% decline in new console sales, which can be attributed to the announcement of next-gen hardware coming next holiday season. On top of that, game sales were down across the board, with both new and pre-owned games suffering 5% and 17% decreases, respectively. The fall in pre-owned sales is particularly bad for GameStop, as that's the company's main source of income.
The only good news for the company is the continued growth of collectible sales, which posted a 21% increase last quarter. This explains the increase of physical goods, besides games, at many locations throughout GameStop stores. As time goes on, it's pretty likely that GameStop will continue to dedicate more shelf space to items such as Funko Pops, t-shirts, and other types of memorabilia. Even that increase hasn't been able to help, as GameStop is still laying off managers.
Earlier this year, GameStop announced it was working on new store concepts that would turn its locations into "cultural hubs" for video games. However, it's rapidly beginning to seem like this plan may be too little too late, as the company continues to struggle in a changing market. It doesn't help that GameStop has faced consistent leadership changes over the past few years, with the company having difficulty holding on to CEOs. The next console generation should help keep GameStop alive for at least a little bit longer, but even that boon no longer seems as though it will be enough.
For the past few years, gamers have watched the rise and fall of GameStop. It seems like the company will meet its demise any day now, which would have a damaging ripple effect on the games industry as a whole. Only time will tell if the company is able to save itself, but gamers may want to find a backup store to purchase physical games in the meantime.
Source: GameStop