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GameStop's future is grim as its stock price crumbles
GameStop is falling, and many analysts and industry observers are skeptical it can recover. The retailer reported earnings yesterday for Q1 of its fiscal 2020 yesterday where it missed its revenue target. Now, the company's stock price has crumbled to $5, which is the lowest this has been since 2013.
For Q1, GameStop generated $1.55 billion in revenues. That was significantly short of Wall Street's expected $1.64 billion. The company did cut costs to improve its earnings per share, but that's not something it can do every quarter. And GameStop's outlook is dire in part because its core business — selling hardware and used games — is starting to dry up.
Used game revenues dropped 20% year-over-year last quarter. And hardware revenues dropped 35 percent in the same comparison. And while the company has diversified into collectibles with its ThinkGeek brand, that growth wasn't enough to offset other declines.
[...] "Pre-owned revenues declined 20% year-on-year in Q1 2019, driven by continued traffic headwinds from a tougher year-on-year software release slate," Baird analyst Colin Sebastian wrote in a note to investors. "While new hardware sales declined 35% year-on-year, as Switch growth was more than offset by declines in Xbox One and PlayStation 4 sales. Reflecting a console cycle now long in the tooth."
Services like Google Stadia won't help GameStop's situation.
See also: GameStop Slumps 40% to 16-Year Low as Gaming Passes It By
The video game sales slump is killing GameStop
GameStop Stock Is Plummeting. The Bonds Are Doing Fine.
GameStop Has Become the Poster Child for Retail Woes and Tech Disruption
Previously: GameStop's Future in Question after Failing to Secure Buyout
GameStop Posts Massive Loss as Pre-Owned Game Sales Plummet
(Score: 2) by Runaway1956 on Thursday June 06 2019, @06:16PM (3 children)
I'm well aware that fiscal years and calendar years don't have to match. The US government's Q1 for any given year starts on Sept. 1. But, we're only in June of 2019 right now. I think someone messed up somewhere with that Q1 statement.
(Score: 2) by Runaway1956 on Thursday June 06 2019, @06:17PM
Phhht - my own error should be obvious. Q1 starts Oct. 1.
(Score: 0) by Anonymous Coward on Thursday June 06 2019, @06:58PM
No, fiscal years are numbered as when they end. In addition, GameStop is probably highly reliant on Christmas and other end-of-calendar year and Q1 was just released, so my guess would be that their fiscal year ends sometime in the first week of February. This would mean that Q1 of 2020 would be the first week of February to the first week of April of the calendar year 2019 and that they are currently in Q2 of 2020.
(Score: 3, Insightful) by TheFool on Thursday June 06 2019, @07:11PM
As far as I know, publicly traded corporations can start their fiscal year pretty much whenever in the US. I've definitely worked for a company in the past that decided to change when they were doing their fiscal year in order to make the various quarters look better. It was calendar year for a while, but then they moved Q1 to the start of June. Corporate was insistent on not using real calendar time when talking about product releases and such, so it was kind of odd to start the year in the middle of the year.
Gametop might start its Q1 in March because that would mean that Q4 would have December (Christmas), January ("we just got you a new game for Christmas, you don't need a new one"), and February (nothing special, but slightly shorter) as one quarter. I'm just guessing of course, but something like that would make their quarters more even, earnings wise.
(Score: 4, Funny) by black6host on Thursday June 06 2019, @06:52PM (7 children)
Ok, if things get much worse and they have to close all their stores they should look into subletting some space from that last Blockbuster in Bend, Oregon. Maybe they could cram a Circuit City counter in there as well, just for old times sake :)
(Score: 2) by Acabatag on Friday June 07 2019, @01:28AM (6 children)
And one of those Radio Shack parts cabinets where R.S. hid the only thing important they sold in their store during the final years.
(Score: 2) by black6host on Friday June 07 2019, @01:33AM (4 children)
OMG, you must mean phones!!!!! Yes, that was the death of them. Shame as a CoCo was the first computer run by electricity that I owned.
(Score: 3, Interesting) by stormreaver on Friday June 07 2019, @02:57AM (3 children)
The CoCo (especially the CoCo 3) was an awesome computer for its time. I ran OS/9 Level 2 (as most of us did). At a time when the expensive IBM XT was king, it was stuck with MS-DOS! XT owners had to dedicate the entire computer to running their BBS's. The CoCo 3, on the other hand, ran my BBS, my code editor (BASIC09), a terminal emulator, and a full-screen video game. All on a low-power, 8-bit CPU that ran at 1.79 MHz.
Those were the days.
(Score: 2) by black6host on Friday June 07 2019, @03:36AM (2 children)
Indeed, those were the days... Multitasking did become available for the IBM PC, certainly with the 386. I know because I ran a BBS back in the 80's on DOS. Being able to edit code (RBBS), or whatnot, while the board was running was nice. That being said I have a special place in my heart for OS-9. Re-entrant code...
(Score: 2) by VLM on Friday June 07 2019, @11:22AM
I ran old minix on a 286 but it was expensive (aka downloaded warez)
OS-9 was awesome for the era. The windowing system pretending its a serial terminal as its API (print endless non-ascii bytes to do GUI stuff) and from memory Multiview gave it a real C API. If you liked OS-9 you'd have loved OS/8 on a PDP-8 as its a similar experience. All the way down to great documentation and crazy price tag.
I did not enjoy the idea of paying $99 at radio shack for a C compiler that was first edition K+R (when second was long out). So I felt I got a "deal" paying $49.95 on sale for a C compiler. Much preferred the linux experience half a decade later in the early 90s of downloading the "C" series of floppy disks for SLS linux which contained GCC for free.
(Score: 2) by stormreaver on Friday June 07 2019, @07:09PM
One of the biggest conceptual hurdles I had to jump when I made the switch from OS/9 to the IBM clones was the latter's lack of re-entrant code. It was a major culture shock that the dominant computing platform was so primitive. It took a long time before I finally accepted that truth. I will always have fond memories of, "LDD [,X++]". Intel's instruction set looks like a psychotic child-killer's demented paint splash-streaks compared to Motorola's relative addressing capabilities.
(Score: 0) by Anonymous Coward on Friday June 07 2019, @03:32AM
You've got questions?
We've got Phones!
(Score: 5, Funny) by ikanreed on Thursday June 06 2019, @07:09PM
You can trade in your used corporation for one dollar off your next purchase.
(Score: 2) by tekk on Thursday June 06 2019, @07:11PM (1 child)
Their online store is actually a pretty good experience and when they shipped me a defective dreamcast disc a couple minutes on the phone and my problem was totally solved. It's actually in a really good place because 1; buying retro games off amazon can be remarkably expensive because Amazon always wants you to buy old-new stock and 2: if you go to 3rd party sellers or amazon you're totally rolling the dice with support if they send you a dead disc.
(Score: 2) by richtopia on Thursday June 06 2019, @07:36PM
I didn't realize they had an online presence. I wanted to buy an Xbox 360 kenect sensor about four months ago, and GameStop reported sold out in all stores I searched, while being listed as unavailable online. I ended up going to ebay.
Buying used games for this new toy has been easy thanks to GameStop. When a used game is about 5 dollars anyway, 4 dollar media mail shipping is a significant increase in price.
(Score: 2) by chewbacon on Thursday June 06 2019, @07:38PM (1 child)
Microsoft and Sony (Nintendo too?) left these guys in the cold with downloading titles instead of hard copies. I used to be a GS shopper, but being low-balled for used games still selling for full price on the shelf, a lackluster rewards program, and slipping customer service gave me less and less value there. Nowadays I don't game as much as I used to (get off my lawn!) so titles I buy, I've researched more and I'm choosier, which makes me comfortable with downloading them instead of the physical copy.
As far as the used game market, I got better prices buying and selling on eBay. Then there was tactics EA was pulling like preventing used game buyers from getting online without a pass ultimately making buying a brand new game cheaper than the used one plus the pass.
Many consumers and the manufacturers themselves have no need for GS anymore. Maybe GS should've marketed themselves to Amazon or something and cashed out.
(Score: 0) by Anonymous Coward on Thursday June 06 2019, @07:54PM
I buy games and dvds at second-hand shops. Picked up a boxed set of Knight Rider series 1 DVDs for $7 recently.
(Score: 5, Funny) by Rupert Pupnick on Thursday June 06 2019, @08:16PM
I also heard that thanks to advances in mobile gaming technology, they are losing pedestrian customers to moving vehicles at crossings.
(Score: 3, Funny) by Anonymous Coward on Thursday June 06 2019, @09:08PM
Shouldn't they have been selling Doom since the 1990s?
No wonder they're having issues. Just sayin'.
(Score: 2) by VLM on Friday June 07 2019, @11:32AM (1 child)
Every couple weeks we discuss GS and its decline.... they're still trying to be a game retailer, LOL.
On the other hand, my son and I are planning an expedition to visit next wednesday because he likes games and its a game store, so its a destination not a logistics supplier. Its somewhere you go to have fun, not to buy stuff.
The point of Chuck E Cheese for smaller kids is not that you can play pac-man cheaper online at home, its get your parents to drive you and your buddies there to hang out. Although I never hung out in a mall in my own youth, its kinda the same idea for GS. So I'm playing taxi (kids don't know what a taxi is anymore, playing uber I guess?) for my son and his friends and they're gonna hang out and talk shit about every game in the store and buy none of them and maybe purchase a fortnite tee shirt or bobble head or whatever because thats most of what they sell.
Honestly its a building full of kids actively seeking out gamer advertising... MS/xbox and sony and the rest should be paying GS just to provide window shopping for their most fanatic customers. Its like a tiny little local version of a gaming conference/show. Mfgrs pay for booths at PAX-EAST they should pay for shelves at GS for the local fans.
Kinda like Barnes and Nobel is more about buying birthday gifts than specifically buying books.
(Score: 2) by Phoenix666 on Friday June 07 2019, @02:32PM
That's a good point. There is still value to collective experience that doesn't translate online. Being in physical proximity to a bunch of other people doing the same thing pushes limbic buttons we seldom remember we have.
Washington DC delenda est.