GameStop Sets A New Financial Record, And It’s No Thanks To Games

Retailer GameStop has released its latest financial earnings report, marking a record-breaking period for the company. During its fiscal Q2 quarter ending August 1, the Texas-based retailer achieved an operating income of $160.2 million, which represents the highest Q2 operating income level since the company went public back in 2002. Net income also rose significantly, reaching $298.7 million compared to $168.6 million during the same period last year.

The primary driver behind this financial milestone was continued growth in GameStop's collectibles category. Net sales for collectibles jumped a substantial 57% year-over-year to $356.3 million, accounting for 45.1% of the company's total net sales for the period. While GameStop was historically known primarily as a video game retailer, its video game category brought in $263.2 million—down from $494.6 million the previous year, which had benefited from the Switch 2 launch. Meanwhile, pre-owned and refurbished business dropped to $170.7 million from $250 million.

Despite physical game sales declining, CEO Ryan Cohen has noted that physical video game sales are "irrelevant" to the company. Cohen has suggested potential business expansions into the popular "live commerce" category seen on TikTok, as well as the possibility of establishing a marketplace for re-selling digital gaming items. Additionally, GameStop has made proposals to buy the auction site eBay, though those proposals have faced rejection from eBay's board thus far; GameStop currently owns more than 43 eBay shares, valued at approximately $4.9 billion.

Overall net sales for GameStop fell from $972.2 million down to $790.2 million, a decrease attributed to last year's Switch 2 launch window, store closures, and the company exiting its business operations in France. Following the report, GameStop's share price tumbled, though the company scaled back its selling, general, and administrative expenses down to $187.1 million. Looking forward, GameStop forecasts an adjusted EBITDA of $650 million for its fiscal year ending January 30, 2027.