Only PS5 and the Xbox Series X Can Rescue GameStop’s Death Spiral
GameStop says the pandemic has increased demand but the game retailer needs a rescue act as it plans to close more stores than ever this year. | Source: Shutterstock.com
- Video game retailer GameStop reveals its finances from the last financial year, confirming smaller net losses than the year before.
- The retailer also says that it plans to close more than 300 stores as it aims to save more money.
- However, these may not be enough to rescue GameStop and it will likely be up to the PS5 and Xbox Series X to save the company.
In the last financial year, GameStop had what it will feel like a good year, says GamesIndustry.biz in a new article . The video game retailer’s revenue was down by 22% over the year before to $6.47 billion and a net loss of $470.9 million. The year before, GameStop had losses of $673 million.
As it aims to make those losses smaller, GameStop plans to close hundreds of stores this financial year. In the last financial year, it closed 321 stores and this year it plans to close that many stores, or more.
The company’s giant losses cannot be fixed by sales of the PS4 and Xbox One, which have been slowing since Sony and Microsoft confirmed their plans for new consoles. GameStop also won’t be rescued by Funko pops, though sales of items like this are now 11% of its business.
Next-Gen Salvation
The only thing that may be able to save GameStop is the PS5 and the Xbox Series X. The retailer is planning “unique experiences” around the two consoles as it aims to get gamers spending money in its stores and not at Amazon, Walmart, or Target.
GameStop will also be selling things such as the new Xbox Series X controller and PS5 memory upgrades. These could potentially make millions more for the retailer.
This may not happen though if the two consoles are delayed. Microsoft has suggested that the Xbox Series X will be released around Thanksgiving and the PS5 also has a holiday 2020 release date. It’s unclear what will happen to GameStop if the consoles aren’t released this year.
