Videogame retailer GameStop reported a decline in first-quarter revenue recently as customers opt for digital downloads over purchases at physical stores, sending its shares down 4.6%.
The company, known for its rollercoaster stock performance and Reddit-fuelled rally in 2021, has long struggled to adapt to the rapidly changing gaming industry as consumer preferences shift away from physical game purchases towards digital downloads, game streaming and online shopping.
Despite expanding its ecommerce platform to include digital downloads and online merchandise, GameStop is yet to fully capitalise on the shift. Revenue from its hardware and accessories unit, which includes sales from new and pre-owned video games, dropped about 32% in the reported quarter.
Following the closure of nearly 600 U.S. stores in 2024, the company also announced the closing of a “significant number” of additional stores this year, signalling that its retail business continued to flounder in spite of turnaround attempts. The company’s efforts to reduce costs helped it report a net profit of $44.8 million for the first quarter, compared with a net loss of $32.3 million a year ago.
It reported an operating loss of $10.8 million in the quarter, which includes $35.5 million of impairment charges related to international restructuring efforts. The company’s first-quarter revenue fell 17% to $732.4 million, compared with $881.8 million a year ago.
Source: Reuters
Image Credit: Stock Image/GameStop