GameStop quarterly revenue misses estimates amid struggles with digital pivot

Dec 9 (Reuters) - GameStop ⁠posted third-quarter ⁠revenue ‍below analysts' estimates on Tuesday, as the video game retailer struggles to gain ground following ‍its pivot to digital downloads and streaming, sending ​its shares down 5.8% in after-hours trading.

The Grapevine, Texas-based company, ​once a dominant force in physical game sales and a poster child of the 2021 meme-stock frenzy, has struggled to reinvent ​itself as gamers increasingly favor online purchases and subscription platforms over visits to brick-and-mortar stores.

GameStop has ​expanded its e-commerce platform to offer digital downloads and merchandise and struck ‌partnerships with publishers to sell exclusive game editions and collectibles, but those efforts are yet ​to bear fruit.

The retailer's challenges ⁠mirror broader industry trends, with major publishers such as Microsoft and Sony pushing subscription ‌services and cloud-based gaming, reducing reliance on physical discs.

At the same time, e-commerce giants such as Amazon have become ‌the preferred destination for gamers and general merchandise shoppers, eroding ‌GameStop's market share.

The company posted third-quarter revenue of $821 million, below analysts' estimates of $987.3 million according to data compiled by LSEG.

GameStop has ‍also faced volatility in its share price since the meme-stock rally, which briefly ⁠made it a market sensation.

Revenue from hardware and accessories, which includes new and pre-owned video games, fell about 12% in the quarter.

(Reporting by Kritika Lamba in Bengaluru; Editing by Krishna Chandra Eluri)

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