GameStop, Hit Hard by Digital Sales of Games, Looks to Close 150 Stores
Last year we published an article about the sale of digital games surpassing expectations for rate at which they were anticipated to be adopted on a large scale. Businesses are now feeling the reeling impact, and now have to make some tough decisions.
During its earnings report for the last fiscal quarter of 2016, Gamestop announced a major decline in the sales in both games and hardware. The company noted that sales declined 13.6% during the 2016 holiday season. GameStop felt a lack of excitement for major AAA titles and competitive sales by other retailers hurt sales significantly.
GameStop CEO Paul Raines agreed with the inference that digital game sales led to decreased sales for the company. Hardware sales fell by a whopping 29.1% and software sales fell by 19.3%. Raines did mention that the company had a good year in certain areas. Sales of collectibles and apparel rose a noticeable 27.8%.
The loss has led GameStop to begin closing “two percent to three percent of its global stores” during 2017. It is not apparent where these closing will occur, but some stores in the United States are expected to close. With the increasing sales of digital games, GameStop will need to adjust to stay afloat. It looks as if the company will look to begin selling more apparel and collectibles, because strong sales at the end of 2016. Nonetheless, the next few months will continue to be challenging for the game retailer as it continues to shift its focus.