Video game retailer GameStop is set to report its third quarter earnings Tuesday, hoping to reverse its trend of falling sales. Revenue is down 31% in the first half of 2020.
The company’s second quarter saw a 27% slump in sales year-over-year despite video game spending reaching its highest level nationally in 10 years.
GameStop’s latest quarter could show more of the same as multiple factors impact its business.
- Game sales were down 10% from Black Friday to Cyber Monday as multiple reports speculated that consumers were waiting to get their hands on next-gen consoles from both Microsoft and Sony before buying new games.
- GameStop is slated to close more than 400 stores globally this year as consumers flock to online retail.
GameStop shares are up 165% year-to-date as investors have remained optimistic in the booming video game industry.
- Overall video game industry sales reached $11.2 billion in the third quarter, up 24% year-over-year, according to The NPD Group.
- In October, GameStop and Microsoft announced a partnership to share lifetime digital sales revenue — including for full game downloads, downloaded content and subscription plans — for any Xbox console sold through its stores.
- GameStop posted an 800% increase in global ecommerce sales in its second quarter, but that only represented about one-fifth of its total net sales.
Digital Outlook: In November, Chewy founder Ryan Cohen — GameStop’s single-largest shareholder — called on the company to do a strategic review of its business.
Cohen wants to transform the company into an e-commerce giant that offers fast shipping on a wide variety of items. He also called on the company to make investments in esports, mobile gaming, and game streaming.
Notable Earnings Reports This Week: