Founded in 1984, in a suburb of Dallas named Grapevine, Texas, USA, GameStop has been the “old grandfather” of the gaming world. GameStop has been one of the few companies to start the sale of video games in physical game discs. The company, besides developing and selling video games, have prospered in business ventures like selling electronic appliances, selling products of other company, like Apple’s Simply Mac, and even launches a monthly tech magazine for the tech lovers.
The company was at its peak between the years 2014 to 2016. But recently, within these two years, the company is riding a record 14-year low in its revenue. As the days are passing by, the downfall of the value of the stocks is accelerating. This condition is hitting the company hard. That is why the company is planning to sell its shares to a third party now.
Why did GameStop Stock Drop
The shares of Gamestop (NYSE: GME), recently, has been slumped and experienced a 14-year low in their fiscal revenue this year. The news spread just after the announcement by Microsoft (NASDAQ: MSFT) of a new subscription service of Xbox One that gives its owners full access to around 100 such games. Gamestop has been a leading game retailer when it comes to selling physical game discs. But with the introduction of its new subscription service, Microsoft has tightened its grip in the market and hurts the sale of physical game discs, which took the Gamestop stock down to 10%.
To get a proper review of its sales, GameStop even issued guidance. That was below expectations, as the company expected itself to report adjusted earnings per share of a break. Also, it had been to a loss of 5 cents for its current quarter versus the estimate of 17 cents.
Though GameStop has been in the market for nearly four decades, the company has heard a lot of criticism from its competitions about its management and different market policies. With the introduction of better technology, other companies are tightening their grip on the market by utilizing these technologies in their product, which was not the case with GameStop.