Falling console sales force GameStop into cost-cutting measures

[midian182]

The big picture: With the PlayStation 5 and Xbox Scarlet machines likely to arrive next year, gamers are understandably choosing to hold off from buying current-gen consoles. The decline in hardware sales is bad news for GameStop, which has seen its revenue and profits fall drastically compared to a year earlier.

It was back in May 2018 when PlayStation boss John Kodera said the PS4 was entering its end of life cycle, and the Xbox One line looks to be in the same position. With the promise of 8K resolution support, SSDs, ray tracing, etc. it’s easy to see why many are waiting for the next-gen machines to arrive, rather than buying one of the current Microsoft/Sony consoles.

In GameStop’s first-quarter fiscal 2019 results, the company reports a 35 percent decrease in hardware sales. The Nintendo Switch did see an uptick, but this was offset by the fall in the number of PS4 and Xbox One consoles that were shifted.

For the quarter ending May 4, GameStop’s revenue was down 13.3% to $1.5 billion. Net income, meanwhile, went from $28.2 million in the same quarter last year to just $6.8 million. The company’s shares fell 30 percent in pre-market trading on the back of the report.

It’s not just hardware sales that are heading in the wrong direction. New software sales were down 4.3 percent to $446.4 million, something GameStop blames on weaker new titles, though the increasing number of people moving to digital downloads would also have been a factor. Pre-owned hardware and software sales were also down, 20.3 percent to $395.3 million.

With its full-year 2019 sales expected to fall between 5 and 10 percent, GameStop is implemented cost-cutting measures, which includes the elimination of its quarterly dividend, saving around $157 million per year. It is also combining the online operations of its ThinkGeek collectibles business with the main GameStop website.

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https://www.techspot.com/news/80380-falling-console-sales-force-gamestop-cost-cutting-measures.html

 

[amstech]

Who in their right mind buys a console from Gamestop?
No one charges more for gaming equipment then they do, its a joke.

 

[Christiaaan]

Who in their right mind buys a console from Gamestop?
No one charges more for gaming equipment then they do, its a joke.

People that buy electronics from bestbuy

 

[amstech]

People that buy electronics from bestbuy

You got me there!

 

[Hardware Geek]

Console makers despise secondary market sales of software. They wanted to kill places like GameStop with the last generation of consoles. They may not have killed them yet, but they definitely have done enough damage that once the next generation of consoles is out, GameStop won't be long for this world.

 

[kira setsu]

People may harp on gamestop but I'll be sad when they finally fall, mainly because it means having a place to find dirt cheap old games is gone, gamestop is mainly worth it to stock up on games from a previous gen.

when all we have is the console storefronts left it'll be a dark day.

 

[drjekelmrhyde]

People may harp on gamestop but I'll be sad when they finally fall, mainly because it means having a place to find dirt cheap old games is gone, gamestop is mainly worth it to stock up on games from a previous gen.

when all we have is the console storefronts left it'll be a dark day.

EBay is still there

 

[TomSEA]

I think the only thing I've bought from GameSpot in the last 10 years have been collectibles.

There are cheaper alternatives almost anywhere you look.

 

[Evernessince]

People may harp on gamestop but I'll be sad when they finally fall, mainly because it means having a place to find dirt cheap old games is gone, gamestop is mainly worth it to stock up on games from a previous gen.

when all we have is the console storefronts left it'll be a dark day.

GameStop ripped people off on trade-ins and overcharged for used games. The only good part about GameStop was the staff.

 

[koblongata]

Consoles need to be computers too, come'on PS4 Xbox your are all PC at heart already.
Just some basic office tasks and browsing.
Whichever does it first without compromises, gonna be sold like hot cakes.

 

[SolidSneak]

Now it's only a matter of time.

 

[fluffydestroyer]

With this age of digital distribution, can't they just make shipping deals with developers and publishers to make physical copies ? for a small sum, you go in the store, you say you want a physical copy of xyz game in your steam library or whatever else library. Couple of days later, after they do the work, they give you a case with a CD, DVD or whatever with cool logo and art work the developer choose.

good or stupid idea ? since buying pc games doesnt exist or is very low and the same is with console games since a lot of other stores have better prices and buy used games doesnt exist anymore, that could be a good idea no ?

 

[DukeJukem]

I remember buying gears of war 1 brand new at walmart. I unwrapped it, took it immediately to gamestop and they offered me like 17 dollars for a fresh never touched game. this company can go under yesteryear for all I care.

 

[DukeJukem]

Consoles need to be computers too, come'on PS4 Xbox your are all PC at heart already.
Just some basic office tasks and browsing.
Whichever does it first without compromises, gonna be sold like hot cakes.

go put linux on a playstation and you have what youre asking for

 

[DukeJukem]

GameStop ripped people off on trade-ins and overcharged for used games. The only good part about GameStop was the staff.

you mean the robots

 

[DukeJukem]

People that buy electronics from bestbuy

u mean the electronics that cost the same on amazon but I can simply drive 15 minutes to best buy and pick up what I want the same day? best buy costs the same as everywhere else and they price match local retailers so.....where's ya point? oh you were just talking without thinking? ok. u mean if I don't like something I bought from best buy I can just take it back when I want instead of waiting to ship something back? no hassles as long as a I have the receipt? wait they also have copies of my receipt in their computer system for an easy hassle free exchange/refund if I lose my receipt? man that sounds terrible. you're right. people who shop at best buy have no intelligence.

 

[Duke Sparrow]

People that buy electronics from bestbuy

u mean the electronics that cost the same on amazon but I can simply drive 15 minutes to best buy and pick up what I want the same day? best buy costs the same as everywhere else and they price match local retailers so.....where's ya point? oh you were just talking without thinking? ok. u mean if I don't like something I bought from best buy I can just take it back when I want instead of waiting to ship something back? no hassles as long as a I have the receipt? wait they also have copies of my receipt in their computer system for an easy hassle free exchange/refund if I lose my receipt? man that sounds terrible. you're right. people who shop at best buy have no intelligence.

Yea I pretty much agree with you on all points. Not sure what that guy was dissing Best Buy for. The business has come a long ways and I think they run a pretty good operation now. Price-matching, excellent return policy, friendly and moderately-well-informed staff at most locations makes it a great place to buy electronics. Their in-house warranty can't be beat either. They even warranty OLED televisions against burn-in, something that even the
manufacturers will not do. You can't find any truly high-end gear at Best Buy, but for mid-range products, I'm not aware of a better place to shop unless you are lucky enough to live near a Micro Center.

 

[ziffel66]

May they die a quick death.

 

[nickp91]

If GameStop had seen that and became a player in the digital space starting a decade ago, they could have survived They now face the same future as Blockbuster

 

[Axiarus]

Who in their right mind buys a console from Gamestop?
No one charges more for gaming equipment then they do, its a joke.

Huh, Amazon and Walmart were the same price as GameStop when I bought my Nintendo Switch. GameStop was less than a mile away.

 

[Axiarus]

But that's a convenience reason. Most people don't care if they have to drive a few extra minutes to buy from a store they like.

But the original quote you responded to was about everything being a better option than GameStop. If everywhere has the same price and GameStop is closer why would I not go there?