GameStop reports decline in revenue as online purchases hit videogame retailer

(Reuters) – Videogame retailer GameStop (NYSE:) reported a fall in second-quarter revenue on Tuesday, as consumers moved away from traditional brick-and-mortar stores to online purchasing.

The company has been struggling with declining sales in its primary business of selling new and used video game discs due to a shift towards digital downloads and game streaming. Several customers also buying games and collectibles through e-commerce.

GameStop CEO Ryan Cohen told investors in June the company intends to operate a smaller number of stores as competition remains intense in the gaming console market.

The company continues to face a near insurmountable barrier to its planned return to growth including an ongoing hardware sales decline as streaming services proliferate and its total lack of any strategy to enter new categories with growth potential, analysts at Wedbush said in a note on Friday.

The company reported revenue of $798.3 million for the quarter ended Aug. 3 compared with $1.16 billion a year earlier. Two analysts polled by LSEG were expecting a revenue of $895.7 million.

Shares of the Grapevine, Texas-based company fell 1.3% in extended trading.

The stock has seen significant volatility this year after online stock influencer Roaring Kitty, whose real name is Keith Gill, returned to X.com after a three-year hiatus, with a cryptic meme that was widely seen as a bullish signal for GameStop.

He was a key player in the 2021 rally in GameStop and other so-called meme stocks that was fueled by individual investors on Reddit’s WallStreetBets forum.