GameStop Corp. (GME) experienced a significant downturn in its Q1 fiscal 2025 results, with total net sales falling 16.9% to $732.4 million from $881.8 million a year earlier. Sales in the hardware and accessories segment dropped 31.7% to $345.3 million and software sales declined 26.7% to $175.6 million.
Hardware now represents 47.1% of net sales, down from 57.3%, while software’s contribution has decreased to 24% from 27.2%. Over 70% of GameStop’s revenues are tied to these declining segments, prompting the need for diversification into higher-growth areas.
Year-to-date, GME shares have lost 24.4%, underperforming competitors such as Best Buy and Microsoft. GME trades at a forward price-to-sales ratio of 3.22X, below the industry average of 3.61X.
