GameStop Stock Drops by Over 30% (and falling) - everybody's favorite local place to buy Pop Figures (and maybe video games if they still sell those) is burning down

Last time you went to Gamestop:

  • < 1 month

    Votes: 11 8.7%
  • < 3 months

    Votes: 13 10.3%
  • < 6 months

    Votes: 16 12.7%
  • < 1 year

    Votes: 8 6.3%
  • > 1 year

    Votes: 60 47.6%
  • never

    Votes: 18 14.3%

  • Total voters
    126

️ronic

kiwifarms.net
SharedScreenshot.jpg


What used to be the destination to by videogames will probably soon be going down the same route as Blockbuster.

GameStop is falling, and many analysts and industry observers are skeptical it can recover. The retailer reported earnings yesterday for Q1 of its fiscal 2020 yesterday where it missed its revenue target. Now, the company’s stock price has crumbled to $5, which is the lowest this has been since 2013.

For Q1, GameStop generated $1.55 billion in revenues. That was significantly short of Wall Street’s expected $1.64 billion. The company did cut costs to improve its earnings per share, but that’s not something it can do every quarter. And GameStop’s outlook is dire in part because its core business — selling hardware and used games — is starting to dry up.
https://venturebeat.com/2019/06/05/gamestops-future-is-grim-as-its-stock-price-crumbles/
Used game revenues dropped 20% year-over-year last quarter. And hardware revenues dropped 35 percent in the same comparison. And while the company has diversified into collectibles with its ThinkGeek brand, that growth wasn’t enough to offset other declines.

On top of all that, GameStop also eliminated its dividend program. Now that this stock no longer pays out earnings to shareholders, that could encourage more people to sell. In turn, that could create some volatility in the price.

So it’s a lot of bad news, and no major analyst expects that to change for the rest of this year.

“The combination of the transformation initiatives, ongoing consumer shift to digital gaming, and current console cycle being in the very late stages are likely to make 2019 a very challenging year,” Telsey Advisory Group analyst Joseph Feldman said.

Why is GameStop doing so poorly?
Analysts are primarily focused on the near term. They live one quarterly earnings report at a time. But if you look at what they say about why GameStop’s performance is so weak, you can see that it’s not necessarily doomed.

“Pre-owned revenues declined 20% year-on-year in Q1 2019, driven by continued traffic headwinds from a tougher year-on-year software release slate,” Baird analyst Colin Sebastian wrote in a note to investors. “While new hardware sales declined 35% year-on-year, as Switch growth was more than offset by declines in Xbox One and PlayStation 4 sales. Reflecting a console cycle now long in the tooth.”

Sebastian is completely right about why GameStop is struggling today. Games like God of War, Far Cry 5, and Monster Hunter: World launched in the first half of 2018. And 2019’s releases haven’t quite matched those hits. That means fewer people are going into GameStop stores to trade in old games.

And then you have the Xbox One and PlayStation 4, which are both finally on the way out. Anyone who wants to purchase one of those consoles likely already has. And while Nintendo Switch is doing better than ever, it’s not enough to make up the difference.

The rest of 2019 probably won’t change that momentum. The second half of the year isn’t going to have anything to match Red Dead Redemption 2, for example.

One more chance
So what is GameStop doing about all of this? Well, its management is planning to try some new programs. It wants to make stores friendlier and more of a destination for gaming fans. The good news for chief executive George Sherman, who took over the role in April, is that GameStop should get at least one last shot to prove its value to gamers.

While 2019 may not have blockbusters to match 2018’s release schedule, big games are on the way. But more importantly, new hardware is coming soon. Sony has confirmed that it’s working on the next PlayStation, and Microsoft is likely going to talk about its system soon.

And that’s crucial for GameStop because it’s still the place that people go to buy new hardware. When the PlayStation 4 and Xbox One launched in November 2013, GameStop was responsible for over half of all their hardware sales. That lasted for months. Amazon is more ubiquitous than ever, so maybe GameStop won’t capture over half of PS5 and the next Xbox sales, but it could still play a big part in that.

So GameStop just needs to survive until the start of the next generation. And, in the meantime, it needs to figure out how to change its stores to convince people coming in for a PS5 that they should return regularly. It’s just not clear that the company knows how to do that.
 

Positron

Subconsciously Suberogatory
True & Honest Fan
kiwifarms.net
Chris's Curse-ye-yo-mama worked.
So what is GameStop doing about all of this? Well, its management is planning to try some new programs. It wants to make stores friendlier and more of a destination for gaming fans.
Maybe they can cater to the autistics and start a "no-noise" hour? It worked so well for Toys-R-Us.
Wait.
 

TowinKarz

Is it Morning Yet?
kiwifarms.net
Yep.

We all knew they've been heading for a cliff for the better part of a year now, I'm only surprised it took this long..... the major sources of revenue, physical game sales and used physical game sales, are being rendered obsolete by media-less digital downloading and there isn't enough of a market left with geek stuff to stay alive.

The last time I saw any appreciable crowd of customers at the local GameStop was around 2015 when midnight release parties were still a thing before everyone just bought early access for a game off Steam.
 
Last edited:

CheezzyMach

Hulkamania Brother!
kiwifarms.net
Yep.

We all knew they've been heading for a cliff for the better part of a year now, I'm only surprised it took this long..... the major sources of revenue, physical game sales and used physical game sales, are being rendered obsolete by media-less digital downloading and there isn't enough of a market left with geek stuff to stay alive.

The last time I saw any appreciable crowd of customers at the local GameStop was around 2015 when midnight release parties were still a thing before everyone just bought early access for a game off Steam.
Gamestop's less than stellar reputation doesn't help either.

Personally and I could be wrong but I think there's still going to be a market for physical media until Congress inevitably tackles the issue of digital ownership. I think Amazon has more to do with Gamestop's woes.
 
Last edited:

_blank_

The Charles Dickens of Disco
True & Honest Fan
kiwifarms.net
I'm still wondering why the fuck they stopped selling DVDs.

Every time I used to go to one, they were always sold out.
I'd assume 2 reasons:

1) Back when Gamestop sold used DVDs, it was probably a given that just like used games, for every one person that comes in selling a used DVD with some resell value, there's a dozen more people trying to trade in DVDs no one was looking for. It was probably easier for them to find space for a dozen used copies of Medal of Honor: Warfighter than it was to find space for two hundred copies of Naruto season eleventy-bajillion.

2) Because Gamestop isn't interested in piecemeal resell values. Why try to convince someone to buy half a dozen obscure used DVDs when you just need to sell them one Funko figure with a popular name brand? Despite what they may otherwise preach, Gamestop isn't interested in trying to cater to the hardcore nerds that would spend hundreds of dollars on customized Warhammer figurines - they're are (or rather, were) attempting to make their bread off of basic bitch popular nerds, the "Big Bang Theory" type of nerd.


Anyway, no love lost for me. Last time I was in a Gamestop I think was last year, and I've decided instead of being fleeced my Gamestop's racket, I'd instead just buy digital copies of games so I can be directly fleeced by whatever entity owns the DRM rights.

...God, the video game industry is so fucked.
 
U

UE 558

Guest
kiwifarms.net
Oh no, now I’ll have to resume buying everything off eBay and Amazon.

I only buy from gay stop for two reasons: 1) A buddy preordered me a birthday gift or 2) They accidentally made a physical used game cheaper than the price on Amazon or Ebay.

The fact that 50% of their “new” games are gutted bothers me to no end, I mainly just go there to help my carless buddy get things he wants and to catch up with a childhood friend who works there part-time for extra scratch
 
Last edited by a moderator:

OmnipotentStupidity

Bleeding Money at Breakneck Speeds
kiwifarms.net
I've not shopped there in over two years, and the last time I tried to go to a local GameStop, the place wasn't just gone: there were people there actively tearing out the flooring, hauling everything into a dump truck, and burning everything that wasn't nailed down or couldn't be resold anywhere.

It was surreal; it was like the entire outlet was doing an exorcism to completely cleanse the area of anything related to GameStop. So absolutely none of this surprises me.
 

Billy_Sama

♂Love and Muscle in Heaven♂
kiwifarms.net
There isn't a real value of buying most used games from Gamestop as its usually a dollar or two cheaper and you might as well get a new copy. Sure I bought a few games this year from them for my switch because I couldn't get them from Best Buy game program (which stop giving out since it was too much of a good value), but I don't really go to them since its overly the same every store with the force fed preorder lines from employees.
 

Cedric_Eff

No secret, it's the meat. Don't skimp on the meat.
kiwifarms.net
I buy my games from the TV Game section at AEON or just go to Book-Off or another recycling store and buy used games there (In Japan, don’t have GameStops.)
 

Some Manajerk

kiwifarms.net
I'll still poke my head in now and again just to see if they might have something I might be interested, which is how i got Deception 4. But the last time i went to GS with something specific in mind to buy there was way back when Shadows of War came out. They gave everyone who'd pre-ordered the game 3 of the bottle openers that came with it because they'd ordered too many.
 
Tags
None

About Us

The Kiwi Farms is about eccentric individuals and communities on the Internet. We call them lolcows because they can be milked for amusement or laughs. Our community is bizarrely diverse and spectators are encouraged to join the discussion.

We do not place intrusive ads, host malware, sell data, or run crypto miners with your browser. If you experience these things, you have a virus. If your malware system says otherwise, it is faulty.

Supporting the Forum

How to Help

The Kiwi Farms is constantly attacked by insane people and very expensive to run. It would not be here without community support.

BTC: 1DgS5RfHw7xA82Yxa5BtgZL65ngwSk6bmm
ETH: 0xc1071c60Ae27C8CC3c834E11289205f8F9C78CA5
BAT: 0xc1071c60Ae27C8CC3c834E11289205f8F9C78CA5
LTC: LSZsFCLUreXAZ9oyc9JRUiRwbhkLCsFi4q
XMR: 438fUMciiahbYemDyww6afT1atgqK3tSTX25SEmYknpmenTR6wvXDMeco1ThX2E8gBQgm9eKd1KAtEQvKzNMFrmjJJpiino