GameStop was hit hard by store closures during the height of the coronavirus pandemic, but its online performance was a sign of hope for the game retailer.
The main takeaway from the report is that GameStop brought in half a billion dollars less than it did during the same time last year, which is blamed on the temporary closure of its stores nationwide due to lockdowns put in place to stem the spread of the coronavirus. But its online sales were way up, as in up more than 500% over last year.
“I was pleased with our team’s ability to adapt quickly and despite significant disruption,” GameStop CEO George Sherman said during an earnings call. “Stores managed to retain most of their planned sales volume to online and curbside pickup, and delivered total sales for the quarter just shy of original expectations.”
It should be noted that GameStop fought the lockdown, maintaining it was an “essential retailer” because of its products like monitors, which people use to work from home. Stores did close, but only after a weekend of big launches for Doom Eternal and Animal Crossing: New Horizons, which drew a wave of criticism. Sherman also took a 50% pay cut in the aftermath of the closures.
Still, GameStop was already shuttering stores for years as it tries to compete in an increasingly digital-focused gaming industry.
Lower sales numbers can also be attributed to the fact that GameStop is also dealing with a transitional year in the industry as hardware sales start to fall before a new generation of consoles is released later this year.
GameStop expects a rebound in hardware sales after the PlayStation 5 and Xbox Series X launch this holiday season, and it might see an uptick in game sales after delayed titles, like The Last of Us Part II, finally hit shelves.
Wedbush analyst Michael Pachter suggested that GameStop’s future may look a bit brighter.
“GameStop is well-positioned to be a primary beneficiary of the new console launches, with market leadership positions for next-gen hardware and packaged software sales likely,” Pachter said. “We remain quite optimistic that it will return to profitability relatively soon.”
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