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GameStop Reports Catastrophic $673 Million Loss For 2018

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Massive gaming retailer GameStop has shared the results of its fourth quarter and fiscal 2018 results which included a loss $673 million for the fiscal year.

Sales on accessories was high

GameStop Reports Catastrophic $673 Million Loss For 2018
GameStop Reports Catastrophic $673 Million Loss For 2018

Figures and details on earnings for the year showed that sales of products like accessories and collectibles were up, though new hardware and software sales as well as the sale of pre-owned items were all down. The report did note that 2017’s fiscal year consisted of 53 weeks as opposed to 2018’s 52 which was referenced in the executives’ comments on the company’s earnings.

Also Read: Sony confirms to stop letting GameStop and other retailers sell PS4 download codes

GameStop at 3.1% loss as compared to previous year

GameStop’s total global sales reported for the fiscal year amounted to $8.3 billion, though that figure was still a 3.1% loss compared to the previous year. The loss of several hundred millions in revenue was one of the key points from the report, and GameStop’s COO Rob Lloyd said that if you exclude the 53rd week from 2017, sales of products like new hardware were in line with the previous fiscal year.
“We are pleased to have delivered fiscal 2018 results within our adjusted guidance range, which included fourth quarter and full year sales growth across video game accessories, collectibles and digital,” Lloyd said in a statement within GameStop’s report. “Excluding the impact of the 53rd week in fiscal 2017, new hardware sales for the year were in line with last year. 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.”

Digital Sales :A threat to GameStop

GameStop Reports Catastrophic $673 Million Loss For 2018
GameStop Reports Catastrophic $673 Million Loss For 2018

A trend towards digital sales has been a threat to GameStop’s brick-and-mortar model, though the company did report that digital receipts for fiscal 2018 were up 16.5% to $1.3 billion. Sony did confirm recently that it will no longer sell digital codes for games through retailers such as GameStop.
Rumors have indicated that GameStop might be moving towards an updated version of it’s stores with a model that would focus more on a “ cultural experience,” though those ideas have not yet been confirmed by the company.

Also Read: ‘Super Smash Bros. Melee’ and ‘Mortal Kombat’ Nominated For World Video Game Hall of Fame

To be clear, this is the same year in which GameStop sold off a section of its business for $700 million. They suffered a $673 million in losses in spite of that. GameStop seems to be aware of how severe the situation is, because it announced a “cost savings and profit improvement initiative” which will include “supply chain efficiencies, operational improvements, expense savings and pricing and promotion optimization” among other things. GameStop says that it doesn’t see this initiative affecting its 2019 performance, but hopes it will be good for its financial health in the long  run.

References: comicbook

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