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posted by martyb on Thursday June 06 2019, @06:10PM   Printer-friendly
from the gameshack dept.

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


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  • (Score: 2) by chewbacon on Thursday June 06 2019, @07:38PM (1 child)

    by chewbacon (1032) on Thursday June 06 2019, @07:38PM (#852396)

    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.

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  • (Score: 0) by Anonymous Coward on Thursday June 06 2019, @07:54PM

    by Anonymous Coward on Thursday June 06 2019, @07:54PM (#852402)

    I buy games and dvds at second-hand shops. Picked up a boxed set of Knight Rider series 1 DVDs for $7 recently.