GameStop Woes Intensify as Company Posts Dismal Holiday Sales

Gamestop generic -Getty-H 2019

Total global sales for the video game retail chain over the nine-week holiday season were $1.8 billion, down more than 25 percent from 2018.

Video game retail chain GameStop on Monday reported its sales results for the nine-week holiday period ended Jan. 4, coming in a dismal 27.5 percent below totals from the same period in 2018. Total global sales for the period were $1.8 billion in 2019.

“We expected a challenging sales environment for the holiday season as our customers continue to delay purchases ahead of anticipated console launches in late 2020," said GameStop CEO George Sherman. "However, the accelerated decline in new hardware and software sales coming out of Black Friday and throughout the month of December was well below our expectations, reflective of overall industry trends."

Overall hardware spending in gaming was down in 2019, indicative of the late life cycle of current-gen console offerings ahead of the launch of Sony and Microsoft's next-gen systems over holiday season 2020. Spending on hardware was down 23 percent to $1.9 billion year-to-date in November.

Based on the disappointing holiday results, Sherman said the company is adjusting its sales outlook for fiscal 2019 and expects earnings to "be below guidance," with the challenges they faced over the period to continue into 2020. "We believe we have the right long-term action plans in place to optimize profitability and increase new revenue streams in advance of new console introductions for holiday 2020," said the exec.

GameStop Corp. has experienced a number of woes over the past year, including a round of layoffs in August which affected more than 120 employees, representing "approximately 14 percent" of the company's total associate base at its headquarters as well as "some other offices," the company told The Hollywood Reporter at the time.