GameStop’s Dismal Results Show No Signs of Turnaround

GameStop’s Dismal Results Show No Signs of Turnaround

On Friday, GameStop Corporation (NYSE: GME) did not show signs of operational recovery as it released its first quarter results earlier than expected, previously announcing that they would be released on June 11 after the market close. The unexpected and dismal results just hours before meme stock influencer Keith Gill, better known as “Roaring Kitty,” hosted his first livestream in three years after helping spark a meme stock rally , which more than half a million viewers watched. But even the return of Roaring Kitty couldn’t help GameStop’s game with its shares falling 40%.

Disastrous results in the first quarter

For the period ended May 4, GameStop reported a 29% decline in net sales to $881.8 million, while FactSet estimates were between $900 million and $1.09 billion. But GameStop narrowed its loss to $32.3 million after losing $50.5 million in the comparable quarter last year. An adjusted loss of $0.12 per share was also worse than Wall Street’s estimate of $0.09.

GameStop has some scary competitors.

Being a one-stop shop for video games, consumer electronics and gaming products places the video game retailer against the mighty Inc (NASDAQ: AMZN), Microsoft Corporation (NASDAQ: MSFT), eBay Inc (NASDAQ: : EBAY), Walmart (NYSE: WMT), Nintendo Co Ltd (OTC: NTDOY) and Best Buy Co Inc (NYSE: BBY). Amazon has a large delivery network and receives delivery orders quickly. Unsurprisingly, Amazon said its revenue more than tripled over the past five years, while GameStop’s revenue halved. When it comes to online game sales, even with its efforts to shorten delivery times, GameStop is struggling to catch up with Amazon.

Although Sony is GameStop’s B2B partner, it is also its B2C competitor since it sells video games directly to consumers. In May, Sony predicted a decline in sales of its PlayStation 5 console, which is in its fifth year. Additionally, Sony was eyeing a decline in overall revenue from its gaming unit, but hoped that greater user engagement and more effective cost control could fuel the segment’s profitability. Alongside Microsoft, which is also both a partner and competitor to GameStop, Sony announced layoffs in its gaming business. Overall, Microsoft is doing well, but above all thanks to the acquisition of Activision Blizzard, thanks to which it has secured its leading position in the field of video games. On Sunday, Microsoft will host its annual video game showcase with Xbox Game Pass taking center stage. Reuters reported that the software giant is preparing to roll out the latest installment of its hit “Call of Duty” franchise on the subscription service in response to stiff competition from Sony and its consoles. With this move, Microsoft hopes to boost the growth of its subscription service. In February, Microsoft announced that its subscription service had 34 million subscribers.

What is certain is that even the video game industry is evolving.

But the video…

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