GameStop has reported some disappointing numbers in a recent quarterly earnings announcement that stem from less video game enthusiasts visiting the company’s stores.
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For those eager at the chance to jab at GameStop and their business model, it’s important to note that while the profits weren’t exactly what they were hoping for, they were still profits. GameStop still earned millions in the year’s second quarter, though the profits were less than those that the gaming retailer was estimated to bring in for the year.
Compared to the year’s first quarter, GameStop’s profits dropped by 3.4 percent as the company brought in $369.3 million for the second quarter that ended on July 29. Hardware sales experience a jump in revenue to bring in $248.4 million, something that’s due in no small part to the Nintendo Switch. The low availability and resulting exclusivity of Nintendo’s latest console has driven gamers to GameStop to clean out the stock of Nintendo Switches as soon as more of them hit the shelves, so it’s no wonder that hardware sales rose.
Compared to last year’s second quarter, the company’s net income has also declined, a year-over-year trend that’s probably a better indicator than any of the shorter-term revenue amounts listed previously. Last year’s second quarter brought in a net income of $27.9 million with the company losing out on just over $5 million this year by bringing in a net income of $22.2 million.
Just like the Nintendo Switch sales affected the hardware sales, there’s also some reasons for the company’s declining sales. The biggest culprit is without a doubt the rise in popularity of purchasing and downloading digital copies of games as opposed to visiting physical locations. While games and codes could easily be purchased through GameStop’s website, or any other gaming retailer’s site for that matter, the fact that you can preorder, preload, and purchase games directly from your console is a convenience that’s hard to pass up.
It was recently reported that GameStop has also made the call to stay open for Thanksgiving this year, a decision that the company said was prompted by requests from both customers and employees.
[via Fortune]
