GameStop's Holiday Sales Drop Due To COVID-19 And PS5/Xbox Series X Sellouts
GameStop has announced how much money it made during the holidays this year.
The holiday shopping season is always important for any retailer, but with GameStop having fallen on tough times in recent months and leaning on the launch of the PS5 and Xbox Series X to help turn things around, this holiday season was especially significant. The company has now announced its sales results for the nine-week holiday period ended January 2, and it was a mixed bag.
Total sales dropped by 3.1 percent to $1.77 billion, and GameStop noted that this downturn was driven by a number of factors. First, GameStop had 11 percent fewer stores this holiday season compared to the last one as part of the company's "de-densification" strategy. GameStop also noted that sales slid because of temporary store closures and various other impacts related to government restrictions pertaining to the COVID-19 pandemic. Overall, GameStop said it saw lower store traffic, especially in December, as COVID-19 cases surged across America.
Due to these various impacts, GameStop said it believes comparable store sales for the nine-week period would result in a high single-digit to low double-digit decrease. GameStop said it also faces "significant worldwide supply chain constraints" that impacted the store's ability to secure products "across all sales channels."
The retailer also noted that it saw "unprecedented demand" for the PS5 and Xbox Series X|S, but unfortunately for the retailer, demand far outstripped supply. Looking ahead, GameStop said it believes the new consoles will help improve sales for the retailer "well into 2021."
In better news for the store, GameStop's digital business was very strong during the holidays, as the retailer saw an increase of over 300% in what it calls E-commerce sales.
Here is a closer look at GameStop's sales for the nine-week holiday period:
- Total comparable store sales rose by 4.8% compared to last year
- Net sales amounted to $1.77 billion, which is down 3.1 percent.
- E-commerce sales jumped by 309% and made up 34% of GameStop's total sales.
- GameStop said its sales across Australia and New Zealand jumped by 31 percent, and these regions outperformed GameStop's other international markets.
A major investor for GameStop has called on the retailer to sell its EB Games businesses in Australia and New Zealand, but these strong results for those markets would seemingly suggest they are worth holding onto.
2020 was a banner year for video games, with basically every major publisher announcing sales increases year-over-year due in part to COVID-19 lockdowns that are keeping people at home playing more games, and spending more money on them. At CES 2021, GameSpot and CNET will be diving into these numbers and more with a panel of experts--check it out here.
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