For retailers, the holidays are often an opportunity to make up for slower points during the year. Unfortunately, GameStop struggled this holiday season, seeing a 27.5% decrease versus 2018 during the same nine-week holiday period. Overall, the chain saw $1.8 billion in sales during this time frame. There are several potential reasons for the steep decline, including an increase in digital downloads, and purchases from online retailers like Amazon. Another potential culprit is diminished interest in the current console generation thanks to the impending release of PlayStation 5 and Xbox Series X. In a statement, GameStop CEO George Sherman pointed to this factor as both the reason for decreased sales, as well as a glimmer of hope for the coming year.
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“We expected a challenging sales environment for the holiday season as our customers continue to delay purchases ahead of anticipated console launches in late 2020. However, the accelerated decline in new hardware and software sales coming out of black Friday and throughout the month of December was well below our expectations, reflective of overall industry trends. On a positive note, we continued to see growth in the Nintendo Switch platform, which supports our view that our sales will strengthen as new consoles and innovative technology are introduced.”
The news comes at a time when the retailer could certainly use a win. In September, GameStop announced their intent to close hundreds of store locations in an attempt at “de-intensifying” the chain. Though focusing on fewer locations could help the company’s bottom line, it still represents lost jobs, while painting a grim picture for the future.
The company’s struggles over the last few years are well-documented. While GameStop’s demise is still far from certain, gamers should definitely take notice. Losing the retail chain would be a major loss for the video game industry, particularly gamers that prefer physical releases over digital ones. While retailers such as Target, Walmart, and Best Buy all offer video games, losing a dedicated video game store could change the make-up of the industry as a whole. Smaller games could become much more difficult to come by, as major releases are prioritized. While Google and Microsoft see an all-digital, streaming future as a guarantee, many in the industry oppose the move, citing concerns over game preservation.
The video game industry is on the precipice of a new era, and GameStop’s role in that future is not guaranteed. Time will tell what happens next.
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