Video game retail chain GameStop said Tuesday it cut an unspecified number of jobs to cut costs and reported lower revenue in the fourth quarter due to growing competition from e-commerce companies and weak spending of consumers.
“A growing mix of digital downloads is hurting physical retail, and there is simply no reason to go to the store if a consumer can simply order a game and download it immediately,” said Michael Pachter, an analyst at Wedbush Securities.
“It is highly unlikely that revenues will recover unless management finds a way to drive traffic into the store.”
GameStop’s recent cost-cutting measures also included the withdrawal of its operations in Ireland, Switzerland and Austria.
GameStop’s fourth-quarter revenue of $1.79 billion was lower than last year’s revenue of $2.23 billion, as the company also faced stiff competition from Amazon.com and eBay.
The company reported adjusted earnings of 22 cents per share, compared to 16 cents a year earlier.
Source: Terra
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