GameStop posts record $673 million loss for 2018

GameStop announced it’s full-year financial results for 2018 earlier today, and it does not look great for the company. The video game retailer posted a record, near $700 million loss for 2018. The loss comes after a difficult year for the specialty retailer while it acknowledged a need to change its business model.

A news release published today (that was picked up by GamesIndustry.biz) includes all the bloody details for GameStop’s 2018 fiscal year. All-told, the company reported a $673 million full-year loss, alongside negative net sales. New hardware, new software, and pre-owned products all dropped revenue by the billions with pre-owned products dropping more than 13% year-over-year. GameStop’s sale of Spring Mobile in November 2018 for $700 million did naught to lessen their record financial loss. Not all is bad for the retailer, whose collectibles grew 11% to $707.5 million.

Rob Lloyd, COO and CFO, released a statement.

“We are pleased to have delivered fiscal 2018 results within our adjusted guidance range, which included fourth quarter and full-year sales growth across video game accessories, collectibles and digital. […] As we think about 2019 and beyond, we recognize the challenges facing our pre-owned video game business and are prepared to address them as we continue to evolve our business model going forward. Importantly, we will continue to leverage our powerful brand to drive growth and, with a new cost savings and profit improvement initiative in place, we will focus our efforts on driving profitability.”

The net loss is only the third in GameStop’s history, following a $7 million loss in 2000 and a $269.7 million loss in 2012. GameStop doesn’t expect to turn things around in just one year and estimates fiscal 2019 will see a 5 to 10% reduction in total sales.

GameStop’s stock (NYSE: GME) has continued to sharply decline as its business has been encroached on by Amazon and digital games purchases. Other problems for GameStop include Sony’s plan to pull digital download codes from retail store shelves. As people move toward digital game stores like PSN and Steam, GameStop’s position in the market as the pre-eminent brick-and-mortar store will become even more precarious.