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Video game retailer GameStop has seen a major decline in revenue in the fourth quarter and say they’ve had to cut an unspecified number of jobs as a result, report Reuters.
As of February 3, the company had around 8,000 full-time salaried and hourly associates and between 13,000 and 18,000 part-time, hourly associates located worldwide. The amount of jobs cut isn’t yet known.
The fourth quarter revenue was reported as being $1.79 billion which is lower than last year’s $2.23 billion. Share prices have fallen by 16% in extended trade too.
Other cost-reduction measures are said to include an exit from operations in Ireland, Switzerland, and Austria.
A Wedbush Securities analyst, named Michael Pachter, gives Reuters a possible reason for the decline: “An increasing mix of digital downloads is hurting physical retail, and there is simply no reason to go to the store if a consumer can just order a game and download it immediately…
“I suspect that they will keep trimming costs to generate breakeven or better, but it is inevitable that their sales will decline to an unsustainable level.”
This news comes in sharp contrast to 2021 which was a wild year for the company as it became one of the most popular meme stocks in the world.
On the back of this, the GameStop NFT marketplace was launched in 2022 but this was wound down earlier this year. The company cites “the continuing regulatory uncertainty of the crypto space” as the reason behind this.
Gamers reactions to the GameStop market
People have taken to Reddit to share their thoughts about the Texas-based company from the sidelines.
One user suggests a shake-up is needed: “As a business, I still think GameStop could thrive, especially here in Canada, but not with the CEO they have now.
“Too many terrible decisions are being made. Video games are being overrun by Funko Pop stock.”
Other Redditors, like ‘AuthenticatedUser,’ suggest the format of the shop is causing the loss: “It’s because they don’t stock anything. It’s their policy now to not stock anything aside from pre-orders and AAA games…”
Featured image: Image by Sergei Tokmakov on Pixabay
