GameStop reported a decline in first-quarter revenue on Tuesday as more consumers turned to digital downloads instead of purchasing games in-store, pushing its shares down 4.6% in after-hours trading.
The Grapevine, Texas-based retailer, widely known for its volatile stock and the Reddit-fueled surge in 2021, continues to face challenges adapting to the fast-evolving gaming landscape, where players increasingly favor digital downloads, game streaming, and online shopping over physical media.
Despite expanding its e-commerce offerings to include digital downloads and online merchandise, GameStop has yet to fully benefit from this industry shift.
Revenue from its hardware and accessories segment—which includes both new and pre-owned video game sales—fell by roughly 32% during the quarter.
Following the closure of nearly 600 U.S. stores earlier in 2024, the company also confirmed plans to shutter a “significant number” of additional locations this year, underscoring ongoing struggles in its core retail operations.
Cost-cutting initiatives helped the company post a net profit of $44.8 million for the quarter, compared to a net loss of $32.3 million in the same period last year.
In May, GameStop sold its Canadian subsidiary, Electronics Boutique Canada, which managed both its retail and e-commerce presence in the country. The company also expects to finalize the sale of its French operations during fiscal 2025.
GameStop reported an operating loss of $10.8 million for the quarter, which includes $35.5 million in impairment charges tied to its international restructuring efforts.
Additionally, the company disclosed it had purchased 4,710 bitcoins between May 3 and June 10 using cash reserves. Back in March, GameStop had announced that its board approved the inclusion of bitcoin as a treasury reserve asset.
Overall, first-quarter revenue fell 17% to $732.4 million, compared to $881.8 million a year earlier.
Although GameStop has expanded its e-commerce platform to offer digital downloads and online merchandise, it has yet to fully take advantage of the industry’s digital shift.
Revenue from its hardware and accessories segment—which includes new and pre-owned video game sales—fell approximately 32% in the quarter.
After closing nearly 600 U.S. stores in 2024, the company also revealed plans to shut down a “significant number” of additional locations this year, indicating ongoing struggles in its retail operations despite efforts to turn the business around.
Cost-cutting measures contributed to a net profit of $44.8 million in the first quarter, a notable improvement from the net loss of $32.3 million reported during the same period last year.
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