It’s been no secret that GameStop’s business model has slowly but surely been crumbling as time moves forward and the video game industry changes and evolves. However, that hasn’t stopped GameStop’s executives from adamantly soldiering on in the face of huge deficits, liketheir $415.3 million loss last fiscal quarter.
Despite these setbacks, GameStop is still trying to reinvigorate its franchises and stay afloat as the industry moves forward into the world of digital downloads and streaming. One of their recent efforts, consisting of huge rebranding andredesigns across many GameStop stores, was an interesting step in a promising direction. Unfortunately, the company recently announced another overall decline in their third quarter, while taking aim at next gen hardware like PS5 and the next Xbox.
RECOMMENDED:Sony Offering Small Holiday Gift to PlayStation Owners
In their reports, GameStop’s earnings decreased across virtually every category, with a total decline in revenue by 25.7 percent to around $1.4 billion. The company took aim at next generation hardware, stating that the reason new hardware sales fell by a whopping 45.8 percent was due to anticipation for the upcoming releases of both the PS5 and new Xbox system.
This spells even worse news for GameStop than it seems on the surface, as these next generation of consoles is not slated until the Holiday season of 2020. This means that GameStop’s hardware sales will very likely keep slipping until this time next year, bringing with it another devastating loss in revenue for the company.
Additionally, new game sales dropped by 32 percent while Nintendo Switch game sales actually grew. However, the sales gained from Switch were not enough to balance out the overall decline in new game sales for the quarter. The company’s accessories category also fell by 13 percent, with the only category that grew collectibles, which improved by an unimpressive 4 percent.
The decline in sales has hit GameStop hard. In September, the company announced that it was going toclose roughly 200 underperforming storesby February 2020. This announcement coincided with their efforts to overhaul remaining stores with rebranding and redesign changes, but also followed the $400 million loss during their last fiscal quarter.
Overall, GameStop reportedly loss around $83.4 million this quarter. While this loss is nowhere near as big as the previous quarter’s loss, it is still another loss that GameStop cannot afford. While the company assuredly is scrambling behind the scenes to somehow salvage their business model in preparation for the next generation of gaming hardware, industry members and fans alike are undoubtedly seeing thefall of GameStop.
MORE:The Rise and Fall of GameStop
