GameStop’s revenue dropped by 17% after pivot to BTC

GameStop saw its stock drop over 3.5% after-hours on Tuesday, after reporting a steep 17% decline in first-quarter revenue, landing at $732.4 million, down from $881.8 million a year earlier. This comes as the company pushes deeper into crypto while its core retail business keeps shrinking.

Analysts had expected stronger performance at $754.2 million, but physical game sales and hardware demand continued to fall across the board.

Despite the slump in revenue, the company reported a net income of $44.8 million, flipping from a $32.3 million net loss in the same quarter last year. Operating losses also narrowed significantly to $10.8 million, compared to $50.6 million in Q1 2024.

But the financial upside didn’t move investors. GME shares slipped to just over $29, and have fallen 3.8% year-to-date. The decline came even after the company announced a major Bitcoin acquisition last month.

GameStop buys Bitcoin, cuts stores, and dumps Canada

On May 28, GameStop disclosed it had bought 4,710 bitcoins, spending about $513 million on the purchase. The company said the buy was funded through debt financing, and at the same time launched a $1.3 billion convertible notes offering to raise additional funds.

It confirmed in March that the board had approved using Bitcoin as a treasury reserve asset. Between May 3 and June 10, the entire 4,710 BTC was added to its books. But there’s still no word on how much more it might plan to buy—or when it might sell.

While the company is throwing cash into crypto, its traditional operations are bleeding. It shut down nearly 600 stores in the U.S. in 2024, and just confirmed plans to close a “significant number” more in 2025. Hardware and accessories, which includes both new and used video games, saw a 32% revenue drop for the quarter.

GameStop is also pulling out of other markets. It sold its Canadian business, known as Electronics Boutique Canada, in early May. That subsidiary ran all physical stores and the e-commerce platform across Canada. The company said it also expects the sale of its French operations to close sometime in fiscal year 2025.

All these exits and shutdowns come as GameStop tries to cut costs. The company said the latest $10.8 million operating loss includes $35.5 million in impairment charges related to international restructuring. That means the numbers would have looked even better without the overseas shakeups.

Revenue tanks, cash pile explodes, stock stays flat

Even though GameStop is closing shops and losing retail momentum, it’s got more cash than ever. As of the latest report, the company holds $6.4 billion in cash, cash equivalents, and marketable securities, a massive jump from the $1 billion it held at the same point in 2024. That growing war chest could fund more Bitcoin purchases down the line, but management hasn’t laid out any targets yet.

GameStop noted that it could choose to liquidate its Bitcoin holdings at any time if cash is needed. That conditional approach signals the investment might not be permanent.

Meanwhile, the ecommerce platform has been expanded to support digital downloads and online merchandise, but there’s no indication yet that those upgrades are bringing in enough money to offset the losses in physical retail. No figures were broken out for online-only sales.

All this is happening while the company’s stock still lags far below its $80 all-time high from January 2021, when WallStreetBets fueled one of the most chaotic retail trading frenzies in history. That hype has long worn off. GameStop is now left with a collapsing store footprint, a volatile new crypto balance sheet, and a pile of cash it hasn’t figured out how to use.

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