CEO Matt Furlong said during GameStop’s Q4 conference call that the company is transforming into a tech company.
The video game retailer is making significant changes to their business model and adapting to the changing world of digital and crypto gaming.
In this article, I’m going to break down the key highlights of GameStop’s Q4 earnings call.
Let’s begin.
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9 major changes happening with GameStop
There are 9 major changes happening or changes that have happened with GameStop since Q4 of 2021 and that fiscal year.
The company has invested in many great assets that are going to fuel the company’s long-term growth and transition into a tech-oriented business.
I will break down GameStop’s financials for Q4 and its fiscal year of 2021 at the end of the list.
#1. Management team of technology veterans
GameStop said during its Q4 conference that it installed a new management team made up of technology veterans.
It also introduced a more ‘equity focused’ executive compensation structure to increase alignment with stockholders.
#2. Refreshed its entire board
The company refreshed its board with stockholders and individuals who possess records of ‘value creation’ while reducing individual director compensation.
#3. Ended relationships
GameStop ended relationships with high-priced external consultants who were costing the company millions of dollars per year.
#4. GameStop recruits hundreds of e-commerce experts
Matt Furlong said during GameStop’s Q4 report that the company hired hundreds of new individuals with e-commerce and technology experience.
They reduced redundant and unnecessary roles.
#5. GameStop ends Q4 with $1.7B in capital
The company recapitalized their balance sheet raising approximately $1.7 billion in capital.
#6. Expanded product catalog
Matt Furlong said GameStop expanded its product catalog to seize more market share in areas such as PC gaming, personal electronics, and virtual reality.
#7. GameStop fulfillment centers
The company invested in fulfillment networks by standing up new facilities in the east coast and west coast.
GameStop opened fulfillment centers in Reno, Nevada and in New York and in Pennsylvania.
#8. U.S. customer service
Matt Furlong also announced during GameStop’s Q4 earnings conference that the company invested in a U.S. based customer service facility based in southern Florida.
#9. Blockchain team dedicated to developing GameStop’s NFT marketplace
And of course, GameStop invested in a dedicated blockchain team to develop its upcoming NFT marketplace.
The CEO said GameStop’s NFT marketplace will be launching by the end of the second quarter of 2022.
“We have learned from the mistakes of the past decade when GameStop failed to adapt to the future of gaming.”
GameStop CEO, Matt furlong
GameStop Q4 Finances
The company had an incredible Q4 and fiscal year in 2021.
Here’s the breakdown.
| Sales in Q4 2021: $2.25 Billion | |
| Net Sales Fiscal Year of 2021: $6.01 Billion | |
| Losses in Q4: $147 Million | |
| Net Income in Q4: $80.3 Million | |
| Liquidity in 2021: $1.27 Billion |
Debt
GameStop has no debt other than a $44.6 million low interest stimulus associated with the French government’s response to Covid19.
Here are 3 honorable mentions from GameStop’s Q4 earnings call:
- GameStop grew its power-up rewards pro members by 31.8% taking memberships to $5.8 million.
- The company launched and redesigned their app with improved scalability for a larger catalog and more functionality to support exclusive offers and promotions.
- GameStop entered a partnership with Immutable X to support the development of GameStop’s NFT marketplace coming this year.
GameStop’s Q4 earnings call was brief and straight to the point.
The company is taking the steps to transform into a tech company with the use of blockchain gaming and crypto innovation through their upcoming NFT marketplace.
GameStop’s NFT marketplace is going to increase in value as the Metaverse becomes a reality at scale.
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