Dec 9 (Reuters) – GameStop posted third-quarter revenue below analysts’ estimates on Tuesday, as the video game retailer struggles to gain ground following its pivot to digital downloads and streaming, sending its shares down 5.8% in after-hours trading.
The Grapevine, Texas-based company, once a dominant force in physical game sales and a poster child of the 2021 meme-stock frenzy, has struggled to reinvent itself as gamers increasingly favor online purchases and subscription platforms over visits to brick-and-mortar stores.
GameStop has expanded its e-commerce platform to offer digital downloads and merchandise and struck partnerships with publishers to sell exclusive game editions and collectibles, but those efforts are yet to bear fruit.
The retailer’s challenges mirror broader industry trends, with major publishers such as Microsoft and Sony pushing subscription services and cloud-based gaming, reducing reliance on physical discs.
At the same time, e-commerce giants such as Amazon have become the preferred destination for gamers and general merchandise shoppers, eroding GameStop’s market share.
The company posted third-quarter revenue of $821 million, below analysts’ estimates of $987.3 million according to data compiled by LSEG.
GameStop has also faced volatility in its share price since the meme-stock rally, which briefly made it a market sensation.
Revenue from hardware and accessories, which includes new and pre-owned video games, fell about 12% in the quarter.
(Reporting by Kritika Lamba in Bengaluru; Editing by Krishna Chandra Eluri)
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