GameStop Lost $160M In Past Three Months, Looking To Crypto And NFTs For Growth
Crypto, NFTs, and Web 3.0 will all be "increasingly relevant for gamers of the future," GameStop says.
Video game retailer GameStop announced earnings results for the last three months, and the company posted an overall loss of $157.9 million. This compares to a loss of $67 million for the same period last year.
While profit declined, GameStop made more in revenue during its Q1, rising 8% to $1.378 billion. Management said on an earnings call that analysts and investors should judge the retailer on revenue first and foremost as a signal of the company's overall health.
GameStop had cash and cash equivalents of $1.035 billion on hand at the end of Q1, which was up from $694.7 million during the same period last year.
In terms of where GameStop makes its money, hardware and accessories amounted to $673.8 million for Q1, or 48.9% of total revenue. Software was $483.7 million, or 35.1% of revenue, and collectibles amounted to $220.9 million, or 16% of total revenue.
GameStop management said it is in the midst of a transforming its business away from being known as a "decaying" traditional brick-and-mortar retailer into a "technology-led organization." Looking to the future, GameStop said it plans to "rebuild and strengthen" its commerce business after years of underinvestment.
What's more, the company is looking to crypto, NFTs, and Web 3.0 as vectors of growth. These categories will be "increasingly relevant for gamers of the future," the company said. To that end, GameStop recently announced plans to launch the GameStop NFT marketplace later this year. This will allow users to store, send, receive, and use cryptocurrencies and NFTs across "decentralized apps."
While GameStop is seemingly a big believer in crypto and NFTs, not everyone agrees. Just this week, Take-Two's Strauss Zelnick warned that "it may not end well" for some companies that invest in blockchain-based metaverse properties, according to VGC. Former Nintendo of America boss Reggie Fils-Aime, meanwhile, is a big believer in the possibilities for NFTs and the blockchain in gaming.
Fils-Aime served on GameStop's board of directors but he left the company in part because management didn't listen to his advice.
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