Omicron Case Throughout 2021 Has Made GameStop Video Game Retailer Huge Loss

– Video game retailer GameStop Corp., big loss in 2021 because of Omicron. (photo: screenshot of gamestop)

JAKARTA - Video game retailer GameStop Corp on Thursday, March 17 reported a net loss for the fourth quarter, due to high costs from supply constraints and also increased spending to turn most brick-and-mortar businesses towards e-commerce.

The company's stock, during 2021, was down 7% in extended trading. "The combination of supply chain issues and the Omicron variant had a sizeable impact on last year's holiday season," Chief Executive Officer Matt Furlong said on an earnings conference call.

Typically, the holiday quarter is a strong time for the company, as Xbox and Playstation are newly launched and demand is high. But component shortages and other supply chain issues, which have plagued console makers like Sony and Microsoft, have taken a toll on GameStop's business.

Like many other retailers, GameStop has suffered as the pandemic wreaked havoc with restrictions leading to store closures. The spread of the Omicron variant further exacerbates the situation.

The company's net sales rose 6.2 percent to 1.88 billion US dollars (Rp 27 trillion), while its gross profit fell 15.7% during the quarter ended January 29.

Wedbush Securities analyst Michael Pachter noted that the company's gross profit fell "due to very poor gross margins."

"Probably lower sales of used games and lower than usual margins and higher than usual hardware sales," Pachter said, as quoted by Reuters.

GameStop has also increased spending to recruit talent, expanded capacity, grew its e-commerce presence and also introduced new products to increase its digital presence.

The company last Thursday also said it would launch its marketplace for tokens, or non-exchangeable NFTs, by the end of the second quarter of the 2022 fiscal year.

The company posted a net loss of USD 147.5 million (Rp 2.1 trillion), or USD 1.94 per share, during the quarter, compared to a profit of USD 80.5 million (Rp 1.1 trillion), or 1. 19 dollars per share, a year earlier.