continues to struggle to hold on to customers as some of the biggest technology companies prepare to lure in gamers with new subscription services.
The videogame retailer on Tuesday reported sales in its fiscal second quarter of $1.29 billion, down 14% compared with a year earlier and less than the $1.34 billion that Wall Street analysts predicted, according to FactSet.
Shares of GameStop fell 16% in after-hours trading and are down 60% so far this year through Tuesday’s close.
The company has been grappling with major shifts in the videogame market as consumers increasingly download games through their gaming consoles and skip purchases of packaged software.
More competition is coming. On Tuesday,
said it would launch a videogame subscription service on Sept. 19 that costs $4.99 a month. Google, part of
plans to roll out a cloud-based gaming site in November that offers a $10-a-month option.
“We are committed to acting with a sense of urgency,” GameStop Chief Executive
said in a news release.
Comparable-store sales at the company were down almost 12% in the quarter, which ended Aug. 3.
GameStop also said its net loss expanded to $415.3 million, or $4.15 a share, from a loss of $24.9 million, or 24 cents a share, last year. GameStop said it earned an adjusted loss of 32 cents in the quarter, worse than the 18-cent-a-share loss analysts predicted.
The steeper loss was due in large part to GameStop’s decision to impair assets, with the company recording a $400.9 million write-down primarily related to goodwill.
GameStop has faced pressure from investors who called for board changes and has grappled with executive turnover. In June, it eliminated its dividend and moved to cut costs.
Write to Micah Maidenberg at email@example.com
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