GameStop Reports Huge Losses After Fiscal 2018 Results

GameStop Black

Latest News

GameStop Reports Huge Losses After Fiscal 2018 Results

April 4, 2019

By: Richard Costa

 
 

GameStop has reported huge losses in the fourth quarter of 2018 as they released the fiscal 2018 results posted on their website, with the caveat that the quarter was short of a week compared to the fourth quarter of 2017. The total global sales from continuing operations have decreased by 7.6% to $3.1 billion compared to $3.5 billion in the fourth quarter of 2017. While the retailer had experienced an increase in total global sales in 2017, the release of the Nintendo Switch was likely a major factor in that growth. This kind of boost might happen again soon with the next-gen consoles from Sony and Microsoft, according to GameSpot's own prediction.

According to the results, the primary factors that contributed to this decrease in total company sales were the shift in the company's fiscal year calendar for the 53rd week in the fiscal year of 2017, as well as the timing of the Call of Duty: Black Ops 4 launch, which had the lowest physical sales of any Call of Duty title within the last decade. The net losses amount to $673 million for the full year, considering other factors such as "asset impairment charges" of $964.2 million that were "primarily related to impairment of goodwill."

The last few years have seen GameStop weathering rough times, from managerial issues, closing of 150 stores, and a website security breach all in early 2017, to a precipitous stock plunge in January this year. Last month we also saw the rumor of the Xbox One S All-Digital Edition, and yesterday it was confirmed that Sony no longer sells PS4 digital codes at retail, which left GameSpot indifferent, as they believe they do better selling currency for digital products. The latest evolution of the digital-only market that is Google Stadia is now out in the open. And yet, the GameSpot higher-ups seem optimistic, which might have to do with their investment in esports stadiums, likely part of their pivot.

As we think about 2019 and beyond, we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model going forward. Importantly, we will continue to leverage our powerful brand to drive growth and, with a new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability. GameStop is a leader in the video game industry, and we remain committed to capitalizing on our leadership position to discover new and unique ways to meet our loyal customers’ entertainment needs and attract new customers.

What do you think of GameStop's losses? Do you see any potential for massive earnings in physical sales in the far future of gaming, or is it more likely it'll become fetish items for collectors? Let us know in the comments below!

Richard Costa
Staff Writer

Hack for hire, indentured egghead, maverick thoughtcriminal. Mainly interested in Western RPGs, first-person immersion, turn-based tactics, point-and-clickers, and card jousting.

From the Web

Comments