COVID-19 has impacted businesses and individuals all over the world, including the massive video game retailer GameStop. In Q1 of 2020, GameStop posted that its revenue was in decline, and that seems to have continued into Q2 of 2020.
Between this year’s bad sales due to COVID and the permanent closure of over 300 GameStop stores, things were not looking good for the retail giant in Q2. However, it did post some rise in sales for its online, e-commerce side of the business, which gave it a little hope. However, those e-sales were not enough to save its bottom line in Q2, which was recently reported for the publicly-traded company.
Q2 (June to August of 2020) for GameStop was a net loss of $111 million. The reported revenue of $942 million is short quite a bit from the estimate $1.02 billion that analysts predicted. Overall, net sales decreased around 27% with a 13% reduction in overall days operational due to the worldwide pandemic. However, GameStop’s e-commerse sales are up about 800% but are still only a small part of GameStop’s overall sales, just about 20% of its revenue. The GameStop stocks dropped between 4% and 5% in response to this unfortunate news, but notably, the total numbers for Q2 2020 aren’t as bad as Q2 2019, strangely.
Along with the bad press of attempting to stay open during a pandemic, claiming it was essential, GameStop seems to be on the decline as used games are no longer top priority for gamers. With rumors of poor treatment of employees and rampant memes about GameStop’s poor trade-in numbers, it’s not a surprise that people are looking to start shopping elsewhere.
More and more gamers making purchases on the e-stores of their consoles, like the eShop and PlayStation Store, means gamers may be seeing the slow death of GameStop stores for good. But this could also cause GameStop to shift focus to become relevant again, which would be great both for the stores and possibly for gaming communities. It’s made several attempts at this so far, so it remains to be seen how this pays off.
GameStop recently added buttons on its website for keeping gamers in touch with next-gen preorder news, and there are also rumors that GameStop is considering installment plans for both the PS5 and Xbox Series S and X. However, this attempt at getting people to preorder through them may be in vain: with the digital-only versions of consoles coming out, there will be even fewer people coming into the stores for physical copies.
Source: Gamespot, investorplace
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