GameStop reported weaker-than-expected third-quarter results, missing Wall Street revenue estimates as declines in its core retail business and smaller Bitcoin-related gains weighed on earnings.
The company posted Q3 revenue of $821 million, below analyst expectations of $987.29 million, according to its earnings filing. GameStop shares fell more than 4% on Wednesday following the announcement.
GameStop disclosed that it held 4,710 Bitcoin during the quarter, recording $9 million in unrealized losses over the period. Despite the quarterly decline, the company’s Bitcoin position remains up $19.4 million year-to-date, based on figures included in its Q3 report filed with the U.S. Securities and Exchange Commission.
The miss continues a broader trend. In the first quarter, GameStop reported revenue of roughly $732 million, also falling short of expectations of $754 million.
Bitcoin Strategy Has Yet to Translate Into Results
GameStop formally adopted a Bitcoin treasury strategy in March, a move that initially pushed its shares up roughly 12% to $35. Those gains were short-lived, with the stock quickly retracing as investors questioned the strategic shift.
In April, the company raised $1.5 billion to fund Bitcoin purchases and acquired 4,710 BTC in May. Shares dropped 11% the day after the treasury announcement, reflecting investor skepticism around the company’s pivot toward digital assets.
CEO Ryan Cohen said in July that Bitcoin and crypto could act as inflation hedges and suggested the company is exploring accepting crypto payments at its retail locations. He also acknowledged that GameStop is working to reduce its dependence on physical hardware and game sales, citing rising costs and declining demand.
Retail Headwinds Persist
GameStop’s legacy business; selling physical video games and reselling used titles, continues to face structural pressure as the gaming industry shifts toward digital distribution.
The company has attempted to offset that decline by expanding into collectibles such as trading cards, but those efforts have yet to materially stabilize revenue.
According to Standard Chartered, GameStop’s stock decline mirrors a broader pullback across companies that have adopted digital asset treasury strategies, with investors growing more cautious amid market saturation and inconsistent returns.
Bigger Picture
Despite brief rallies, GameStop shares have trended downward since the Bitcoin treasury move in March. The latest earnings suggest that holding Bitcoin has not been enough to offset declining sales in the company’s core retail operations.
For now, the results indicate that GameStop’s crypto strategy remains more of a balance-sheet experiment than a solution to its underlying business challenges.
