GameStop Reports Loss, Says It's Focused On The 'Future Of Gaming'

GameStop reported a net loss of $147.5 million in the fourth quarter of 2021 but seemed to downplay the loss, calling it a part of its game plan.

CEO Matt Furlong said Gamestop had already learned its bitter lessons from the "mistakes of the decade" when it did not adapt to the changes in the video games industry. He clarified during the company's earnings conference call that the video game retailer is playing the long game instead of shooting for short-term profits.

"It is important to stress the GameStop had become such a cyclical business and so capital-starved that we have had to rebuild it from within," he noted. "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."

GameStop surprised investors when it reported a net loss of $147.5 million in the holiday quarter. It surpassed revenue expectations with a 6% increase in quarter-on-quarter sales of $2.25 billion.

Unfortunately, while analysts expected earnings of over 80 cents per share, the company reported a net loss of $1.94 per share over an income of $1.18 per share in Q4 2020.

Gamestop struck an optimistic note and said that it is currently strengthening relationships with gaming brands. It is also looking for new ways to boost revenue, including launching a new marketplace for Non-Fungible Tokens (NFTs) by the end of Q2 2022.

"We see significant long-term potential in the more than $40 billion market for NFTs. In keeping with our focus on the customer, we are going to continue taking steps to create new offerings and make targeted bets in blockchain gaming and cryptocurrency," the CEO said.

Furlong also revealed that Gamestop had made progress in achieving its digital goals. It has collaborated with PC gaming brands such as Corsair, Lenovo and Alienware.

Gamestop has launched a redesigned app and hired new talents with knowledge in operations, ecommerce and blockchain gaming. "We felt, and continue to feel, that investing in our customers and rebuilding brand loyalty right now is in the company’s best interest over the long term," Furlong said.