GameStop is facing an uphill battle. Digital sales of video games are increasing rapidly, with both PlayStation and Xbox offering digital-only versions of their next-generation consoles. A retail-focused video game storefront like GameStop can only do so much to minimize the losses, even with the help of a weird anti-capitalist movement inflating the company’s stock value. As evidence of that, GameStop’s latest financial earnings report has confirmed the company has lost an astonishing $100 million over the past three months.
In its financial reporting, GameStop detailed its most recent quarter ending October 2021. While GameStop confirmed that it suffered a net loss of $105.4 million over the past quarter, there were some positive takeaways, too. For example, GameStop generated net sales of $1.183 billion over the quarter, which is a significant improvement over the prior quarter’s net sales of $942 million. It should also be noted that the current quarter is typically much stronger for retailers, what with the holiday season.
Additionally, GameStop reports that the quarter ended without GameStop holding any long-term debt outside of a $47.5 million low-interest loan from the French government for pandemic assistance. GameStop even took the opportunity to enter a new lease for a fulfillment center in Reno, Nevada that will bolster the company’s shipping efforts over a wider area of the United States, as well as a lease for a Florida-based customer care facility.
While increased online efforts for GameStop aren’t explicitly mentioned, the writing seems to be on the wall for the retailer. What GameStop did say is that investors should “assess our execution” based on long-term revenue growth expectations. GameStop is effectively saying that losses now will result in growth later.
All eyes have been on GameStop’s stock prices since the financial call. GameStop’s stock price rose over $300 a share in January in a loosely organized effort to crush hedge funds that were short-selling the stock expecting GameStop to go under. That price has fluctuated wildly in the months since, but few drops have been as significant as today’s. It’s 10% down, arriving at $155.76 before markets closed. What will happen tomorrow is anyone’s guess.
If some were worried that GameStop would be at risk of going under today, or soon for that matter, that doesn’t appear to be the case. Despite its losses, GameStop continues to move forward with high expectations toward the future. Shoppers can expect to find plenty of great GameStop trade-in deals on Nintendo Switches and high prices on used games through the holidays.