Your local GameStop may not be open for much longer following the company's latest, and not very positive, second quarter fiscal results.
As Engadget reports, the sales and earnings report for GameStop covering the second quarter ending on Aug. 3 do not make for happy reading. Global sales decreased 14.3 percent to a total of $1.3 billion. As a reminder we are at the latter end of a console generation, GameStop's hardware sales decreased by 41.1 percent, which the company notes is a reflection of Sony and Microsoft talking about the PlayStation 5 and Project Scarlett arriving next year.
Software sales also tumbled, with a 5.3 percent decrease in new software sales, a 17.5 percent decrease in pre-owned sales, 9.5 percent decrease in accessories, and even digital receipts were down 11.2 percent. This led to an adjusted net income loss for the second quarter of $32 million and a clear need for change required.
With that in mind, GameStop CFO James Bell has announced the company's intention to close between 180 and 200 "underperforming" stores before the end of 2019. However, he also expects, "a much larger tranche of closures over the coming 12 to 24 months," so this is far from the end of stores disappearing.
It's important to point out that GameStop operates over 5,700 stores across 14 countries. To have just 200 of those underperforming would be unsurprising, but what we don't know is how many more stores Bell has in his sights for closure next year. His language suggests at least hundreds more.
Some relief will come next year when the PS5 and next Xbox launch, which should happen in the second half of the year. A small boost will also be felt in the coming few months, not only because we are entering the holiday season, but because Nintendo is launching the Switch Lite on Sept. 20, which gives GameStop a new opportunity to sell hardware bundles.