American consumer electronics and video game company GameStop Corp released its first-quarter earnings Wednesday. The company managed to beat average analysts' expectations for the quarter, attributing part of its success to its recent shift towards a more online-focused business model amid increasing competition from retailers such as Amazon and Walmart.
GameStop reported a net loss of $157.9 million for the quarter, significantly worse than the $66 million loss it reported over the same period last year. This translates to a loss per share of $2.08. The company generated revenue of $1.38 billion, slightly up from the $1.27 billion it reported last year.
GameStop sold $673.8 million in hardware, such as gaming consoles and peripherals, accounting for 48.9% of total sales. This was down from the previous quarter's $703.5 million. Software brought in $483.7 million, up from $397.9 million the previous quarter, and collectibles brought in $220.9 million, up from $175.4 million in Q1 2021.
The company's collectibles success this quarter compared to the previous year's quarter might explain why it's pushing on non-fungible tokens (NFTs), which have become a new form of digital memento that users can collect and resell. NFTs are digital products or artwork that are linked to the blockchain and can be verified as the original through the same network.
GameStop previously said it plans to create an NFT marketplace by the end of the current quarter, and it reiterated that timeframe in its press statement on Wednesday. GameStop has announced that it has taken efforts to facilitate the recent introduction of a digital asset wallet that will allow customers to transfer and receive tokens.
Since the start of the pandemic, the company has not published any financial guidance. In March, GameStop CEO Matt Furlong stated that the company does not believe it would be wise to issue advice during the early phases of its transition, given the current global crisis.
GameStop's physical retail business, for which it is best known, was severely impacted by store closures during the COVID-19 outbreak. During the pandemic, the company shifted its focus to online sales as more customers moved to e-commerce.
GameStop's stock skyrocketed by more than 687% last year as it was at the heart of a struggle between retail investors collaborating on online forums and Wall Street hedge funds that had taken short positions in the company.
GameStop released its digital asset wallet in May, which allowed users to store, transmit, receive, and use bitcoins and non-fungible tokens (NFTs). The wallet may also be used to make purchases on GameStop's upcoming NFT marketplace.
