GameStop is in a weird place. With the increase in sales for digital game licenses, the company has began focusing on more pop culture and novelty items while still trying to push physical game sales. Unfortunately, it seems like redirection isn’t paying dividends, and the bottom line is boldly supporting that.

The gaming-focused retailer released its third quarter fiscal report, which showed a extensive $488.6 million is net income loss. The company saw a 13.4% decrease in pre-owned game sales, which is where the company generates a large portion of their revenue.

GameStop, which has been one of the most popular retailers for gaming needs, has began to shift its focus more towards the collectibles spectrum of gaming, by incorporating various gaming-themed items, to help drive overall business with the increased popularity and convenience of purchasing games digitally.

Chief operating officer and chief financial officer of GameStop, Rob Lloyd, did state that while the company did take a hit with their income, they did see overall growth. “We experienced solid growth in the third quarter, including double-digit growth across software, hardware, accessories and collectibles, underscoring GameStop’s leadership position in video games and our unique ability to satisfy all of our customers’ entertainment needs” Lloyd stated in during the fiscal debriefing. While pre-owned game sales took a hit, hardware sales increased 12.8%, along with a 10.9% increase in new game sales, and a 32.6% increase in accessory sales (controllers, headsets, etc). With multiple strong, AAA titles, such as Marvel’s Spider-Man and Rockstar’s Red Dead Redemption 2, releasing during this quarter, it makes sense to see increases across the board in this fashion; especially with multiple console bundles being available for those titles.

It would be safe to assume GameStop will see an increase after Q4 is wrapped, due to large holiday sales, but the income loss of this magnitude for GameStop is one that raises many concerns for the company currently, and especially in the years to come, as consumers slowly move to a future of primarily digital game sales.

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