GameStop Lost $381 Million Last Year, Will Look To NFTs And Crypto For Success In The Future
GameStop says it will make "targeted bets in blockchain gaming and cryptocurrency."
Retailer GameStop has announced earnings, and the past year was a challenging one for the company. The company posted an overall loss of $381 million for fiscal year 2021. GameStop CEO Matt Furlong said in an briefing that there were multiple factors that negatively impacted GameStop's results in the past year, but the company remains steadfast in its commitment to taking a hit now if it leads to greater results down the road.
"The combination of supply chain issues and the omicron variant had a sizable impact on this past year's holiday season," Furlong said. "We made a conscious decision to lean in and absorb higher costs in order to meet customer demand. We felt, and continue to feel, that investing in our customers and rebuilding our brand loyalty right now is in the company's best interest over the long term."
Furlong also reiterated during the call that GameStop is making moves to become a "technology" company as opposed to strictly a video game retailer. Furlong said GameStop aims to become a "customer-obsessed technology company; one that has wider offerings, more competitive pricing, faster shopping, stronger customer service, and an easier shopping experience."
Although GameStop posted a massive loss for the past fiscal year, Furlong mentioned that GameStop made several changes to help improve profitability. One such method was by cutting ties with external consultants, which were costing the company "millions" of dollars per year, Furlong said without naming these consultants.
As for how GameStop plans to turn things around, Furlong said GameStop will look to NFTs and crypto. "We see significant long-term potential in the more than $40 billion market for NFTs," Furlong said. "We are going to continue taking steps to create new offerings and make targeted bets in blockchain gaming and cryptocurrency. We have learned from the mistakes of the past decade when GameStop failed to adapt to the future of gaming."
One of the bets that GameStop is making in the NFT/crypto space is through its $100 million partnership with Immutable X for an NFT marketplace.
While GameStop posted a big loss for the year, it ended fiscal 2021 with $1.27 billion in cash, which was about $760 million higher than at the close of fiscal year 2020.
Also of note, GameStop disclosed that it closed 174 stores in the US, 22 in Canada, and 47 in Europe. It did not close any in Australia, which continues to have 417 stores. In total, GameStop had 4,573 stores worldwide as of January 29, 2022, which is down from 4,816 on January 30, 2021.
You can read GameStop's earnings filing here.
In other recent news, Reggie Fils-Aime, the former Nintendo of America president who served on GameStop's board of directors for a period of time, has criticized GameStop management for not allowing him to attend planning sessions to map out GameStop's future.
"The issue was that as the strategy was beginning to be developed, I asked to be part of the team to develop the strategy. I knew the business. I knew it as a consumer, I knew it as a vendor; I had pretty strong opinions on how the business needed to be pivoted. But I was rebuffed," Fils-Aime said. "The perspective was, 'Reggie, we want to keep the team small... so it's going to be myself [Cohen] and a few of the people I brought on board.'"
Fils-Aime flat-out said billionaire GameStop investor Ryan Cohen and the team around him "don't know this business; don't understand the players." When Fils-Aime was denied a spot on the strategy team for GameStop's path forward, he took this as a sign that it was time to go.
"I took that as code for, 'Thank you, but we really don't want any other ideas.' For me, that was not acceptable," he said.
The products discussed here were independently chosen by our editors. GameSpot may get a share of the revenue if you buy anything featured on our site.
Got a news tip or want to contact us directly? Email email@example.com