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Leading video gaming merchant GameStop reported a $158 million net loss for Q1 2022 and now looks ahead toward NFT opportunities.
GameStop (NYSE: GME) reported its fiscal Q1 2022 earnings late Wednesday, revealing mixed results. The world’s largest video game retailer raked in $1.38 billion in revenue, representing a notable increase from the $1.27 billion realized in the year-ago quarter. The company’s revenue haul for its fiscal quarter also surpassed analysts’ expectations set at $1.32 billion. However, GameStop also suffered a $157.9 million net loss for the period, which far exceeds the $66 million net drop seen in the year-ago quarter. In addition, the leading video game, consumer electronics, and gaming merchandise retailer also saw a shrinkage in hardware sales for the quarter.
GameStop stock fluctuated between positive and negative territory in the after-hours trading session following its Q1 2022 results.
Other Key Takeaways from GameStop Q1 2022 Result
According to its quarterly financial report, GameStop’s inventory rose to $917.6 million from $570.9 million a year earlier. This came amid an increase in customer demand and prevalent supply chain disruptions. Furthermore, the leading video gaming retailer also saw Q1 sales of game consoles and accessories up to $673.8 million. However, this figure was still down from the $703.5 million realized in the year-ago quarter. Conversely, GameStop raked in $483.7 million on software, up from $397.9 million in the year-ago quarter. In addition, the company also realized a revenue of $220.9 million on collectibles, up from $175.4 million in fiscal Q1 of 2022.
With its latest quarterly results done and dusted, GameStop looks ahead toward a more online-based business model. This agenda will undoubtedly put the brick-and-mortar company on a competition collision course with established giants such as Amazon.com Inc (NASDAQ: AMZN) and Walmart Inc (NYSE: WMT). GameStop decided to pivot from physical stores due to the adverse impact it suffered from Covid. Several stores closed during the lockdown affected the company’s physical retail business and subsequent financial bottom line. Since then, GameStop has strengthened its online sales capabilities and outlook.
NFTs and Futuristic Gaming
GameStop is also looking to the future of gaming by launching a non-fungible token (NFT) marketplace. Slated to launch by the end of its fiscal second quarter, this NFT initiative will see support from GameStop’s recently-established digital asset wallet. This wallet facilitates storing, sending, receiving, and using cryptocurrencies and NFTs.
As it gradually pivots towards a more tech-oriented platform, GameStop is yet to provide a proper financial outlook. However, company CEO Matt Furlong does not deem this necessary at the moment, especially “during the early stages of our transformation”. Furlong also added:
“It is important to stress that GameStop had become such a cyclical business and so capital starved that we have had to rebuild it from within. We’ve also had to change the way we assess revenue opportunities by starting to embrace, rather than run from, the new frontiers of gaming.”