Despite coronavirus-led video game sales spike, GameStop decrease expected
Coronavirus prompted increased consumer spending on video games during first quarter of 2020
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GameStop isn't winning these days.
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| GME | GAMESTOP CORP. | 28.94 | +1.38 | +4.99% |
Same-store sales dropped 17 percent and including store closures due to the coronavirus sales were down 30 percent, the retailer disclosed on Tuesday.
The company also posted a loss of $1.61 per share, wider than expected while revenue was $1.02 billion, also slightly less than expected.
However, video game purchases in the U.S. across the industry reached record levels during the first quarter -- spurred on by the coronavirus pandemic, according to a report from market research company The NPD Group.
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“Video games have brought comfort and connection to millions during this challenging time,” Mat Piscatella, NPD’s games industry analyst, said in a statement.
“As people have stayed at home more, they’ve utilized gaming not only as a diversion and an escape but also as a means of staying connected with family and friends,” Piscatella added. “Whether it was on console or mobile, PC or virtual reality, gaming experienced play and sales growth during the first quarter.”
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Consumer spending on video gaming overall was up by 9 percent compared to last year, totaling $10.86 billion. Video game content sales totaled $9.58 billion, an 11 percent increase from last year, according to the report.
“Gains were seen across digital console and PC content, mobile and subscription spending, as well as across hardware and accessories categories,” the report said.
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Some of the best-performing video games during that time frame included "Animal Crossing: New Horizons," "Call of Duty: Modern Warfare," "Grand Theft Auto V," "Fortnite" and "MLB The Show 20," according to NPD.
Hardware platforms sales reached $773 million, increasing 2 percent from last year, while sales of video game accessories such as headsets and gamepads, reached $503 million, an increase of 1 percent.
According to NPD, hardware sales were spurred on by sales of the Nintendo Switch hardware.
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In March, GameStop argued it should be considered “essential retail” as cities and states were implementing lockdowns on nonessential businesses and stay-at-home orders.
The company reportedly told employees in a memo to keep stores open.
“Due to the products we carry that enable and enhance our customers’ experience in working from home, we believe GameStop is essential retail and therefore is able to remain open during this time,” the note read, according to Kotaku.
On March 22, the retailer announced on its website that its stores would remain open but customers would have to order merchandise online to pick up outside the store.