After a disastrous third quarter earnings report, no one really expected GameStop‘s (NYSE: GME) holiday sales to be particularly good, but was there anyone thinking they would have been this bad?
Sales cratered almost across the board. The magnitude of the drop even caught management by surprise, as it was forced to cut the guidance it issued just last month. It’s clear the video game retailer desperately needs the console upgrade cycle to begin in earnest soon.
However, that catalyst is still almost a year away. Investors may be wondering if GameStop can hang on until then, especially considering the retailer is essentially a “fourth quarter” company that generates a disproportionate amount of its sales and earnings in the last period of the year. Let’s take a closer look at whether it can beat the clock.
Image source: Getty Images.
The naughty list
GameStop got a lump of coal in its Christmas stocking. Global sales plunged 27.5% to $1.83 billion for the nine-week period that ended Jan. 5, as comparable store sales tumbled 24.7%.
It said its results were “indicative of overall industry trends impacting the video game industry and driven by an accelerated decline in new hardware and software sales, particularly in the month of December.” People just aren’t buying games and gaming gear anymore, though much of the blame is being placed on the looming upgrade cycle.
Microsoft(NASDAQ: MSFT) and Sony(NYSE: SNE) will be introducing new Xbox and PlayStation gaming consoles, respectively, later this year. Many people are simply holding off on purchasing new gaming hardware and software until the latest equipment and titles are available.
GameStop didn’t break out sales from each of its merchandise categories, but CEO George Sherman said in a statement, “[T]he accelerated decline in new hardware and software sales coming out of black Friday and throughout the month of December was well below our expectations.”
It doesn’t bode well at all for the full fourth quarter report. The one bright spot was the Nintendo Switch platform, which continued to see sales growth. This is giving GameStop confidence that when the new consoles arrive, sales will follow. But first, the business has to hold out that long.
There’s still a future
Don’t worry, it will. It won’t be pretty, but GameStop will still be there at the end. How much the console upgrade cycle will improve the retailer’s position — and for how long — remains to be seen, but GameStop can manage its business and expenses until the next Xbox and PlayStation are on its shelves.
GameStop operates around 5,600 stores, but it doesn’t own those locations, choosing instead to lease the space. The terms of the leases run anywhere from one to five years, but they tend to average around two years. As a result, should it become financially necessary, GameStop would be able to close a large number of stores relatively quickly. It can also cut other expenses if required (and is doing so).
Moreover, GameStop has a healthy balance sheet and generates positive cash flow, despite declining sales. As of last month, it anticipated generating between $200 million and $220 million in adjusted free cash flow for the full year.
Not much to look forward to
GameStop should be able to ride out this arid sales period without fear of going under and be ready when the upgrade cycle begins. However, that doesn’t necessarily mean it has a bright future.
The industry is moving inexorably towards online and digital download gaming; it is not returning to a physical media environment. There may always be — or at least for the foreseeable future — a market for physical games and equipment, because not everyone is embracing the new reality. But both Microsoft and Sony are building hardware that is designed for the brave new world of gaming, and every year more consumers decide to abandon physical media.
The industry has evolved vastly since Xbox One and PlayStation 4 were released in 2013. GameStop has not. Even its vision for revival, such as turning its stores into destinations where gamers can try out the latest titles, isn’t so much a reimagining of what the GameStop of tomorrow will be, but rather a repurposing of what it currently is.
The video game retailer will make it through this year and beyond, but that doesn’t mean it’s a company that an investor would want to own.
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CHICAGO (AP) — United Airlines has struck a deal with Elon Musk’s SpaceX to offer satellite-based Starlink WiFi service on flights within the next several years.
The airline said Friday the service will be free to passengers.
United said it will begin testing the service early next year and begin offering it on some flights by later in 2025.
Financial details of the deal were not disclosed.
The announcement comes as airlines rush to offer more amenities as a way to stand out when passengers pick a carrier for a trip. United’s goal is to make sitting on a plane pretty much like being on the ground when it comes to browsing the internet, streaming entertainment and playing games.
“Everything you can do on the ground, you’ll soon be able to do on board a United plane at 35,000 feet, just about anywhere in the world,” CEO Scott Kirby said in announcing the deal.
The airline says Starlink will allow passengers to get internet access even over oceans and polar regions where traditional cell or Wi-Fi signals may be weak or missing.
Sony has made it easy for Canadian consumers to preorder the PlayStation 5 Pro in Canada directly from PlayStation’s official website. Here’s how:
Visit the Official Website: Go to direct.playstation.com and navigate to the PS5 Pro section once preorders go live on September 26, 2024.
Create or Log in to Your PlayStation Account: If you don’t have a PlayStation account, you will need to create one. Existing users can simply log in to proceed.
Place Your Preorder: Once logged in, follow the instructions to preorder your PS5 Pro. Ensure you have a valid payment method ready and double-check your shipping information for accuracy.
Preorder Through Major Canadian Retailers
While preordering directly from PlayStation is a popular option, you can also secure your PS5 Pro through trusted Canadian retailers. These retailers are expected to offer preorders on or after September 26:
Best Buy Canada
Walmart Canada
EB Games (GameStop)
Amazon Canada
The Source
Steps to Preorder via Canadian Retailers:
Visit Retailer Websites: Search for “PlayStation 5 Pro” on the website of your preferred retailer starting on September 26.
Create or Log in to Your Account: If you’re shopping online, having an account with the retailer can speed up the preorder process.
Preorder in Store: For those who prefer in-person shopping, check with local stores regarding availability and preorder policies.
3. Sign Up for Notifications
Many retailers and websites offer the option to sign up for notifications when the preorder goes live. If you’re worried about missing out due to high demand, this can be a useful option.
Visit Retailer Sites: Look for a “Notify Me” or “Email Alerts” option and enter your email to stay informed.
Use PlayStation Alerts: Sign up for notifications directly through Sony to be one of the first to know when preorders are available.
4. Prepare for High Demand
Preordering the PS5 Pro is expected to be competitive, with high demand likely to result in quick sellouts, just as with the initial release of the original PS5. To maximize your chances of securing a preorder:
Act Quickly: Be prepared to place your order as soon as preorders open. Timing is key, as stock can run out within minutes.
Double-Check Payment Information: Ensure your credit card or payment method is ready to go. Any delays during the checkout process could result in losing your spot.
Stay Informed: Monitor PlayStation and retailer websites for updates on restocks or additional preorder windows.
Final Thoughts
The PlayStation 5 Pro is set to take gaming to the next level with its enhanced performance, graphics, and new features. Canadian gamers should be ready to act fast when preorders open on September 26, 2024, to secure their console ahead of the holiday season. Whether you choose to preorder through PlayStation’s official website or your preferred retailer, following the steps outlined above will help ensure a smooth and successful preorder experience.
For more details on the PS5 Pro and to preorder, visit direct.playstation.com or stay tuned to updates from major Canadian retailers.
Since the PlayStation 5 (PS5) launched four years ago, PlayStation has continuously evolved to meet the demands of its players. Today, we are excited to announce the next step in this journey: the PlayStation 5 Pro. Designed for the most dedicated players and game creators, the PS5 Pro brings groundbreaking advancements in gaming hardware, raising the bar for what’s possible.
Key Features of the PS5 Pro
The PS5 Pro comes equipped with several key performance enhancements, addressing the requests of gamers for smoother, higher-quality graphics at a consistent 60 frames per second (FPS). The console’s standout features include:
Upgraded GPU: The PS5 Pro’s GPU boasts 67% more Compute Units than the current PS5, combined with 28% faster memory. This allows for up to 45% faster rendering speeds, ensuring a smoother gaming experience.
Advanced Ray Tracing: Ray tracing capabilities have been significantly enhanced, with reflections and refractions of light being processed at double or triple the speed of the current PS5, creating more dynamic visuals.
AI-Driven Upscaling: Introducing PlayStation Spectral Super Resolution, an AI-based upscaling technology that adds extraordinary detail to images, resulting in sharper image clarity.
Backward Compatibility & Game Boost: More than 8,500 PS4 games playable on PS5 Pro will benefit from PS5 Pro Game Boost, stabilizing or enhancing performance. PS4 games will also see improved resolution on select titles.
VRR & 8K Support: The PS5 Pro supports Variable Refresh Rate (VRR) and 8K gaming for the ultimate visual experience, while also launching with the latest wireless technology, Wi-Fi 7, in supported regions.
Optimized Games & Patches
Game creators have quickly embraced the new technology that comes with the PS5 Pro. Many games will receive free updates to take full advantage of the console’s new features, labeled as PS5 Pro Enhanced. Some of the highly anticipated titles include:
Alan Wake 2
Assassin’s Creed: Shadows
Demon’s Souls
Dragon’s Dogma 2
Final Fantasy 7 Rebirth
Gran Turismo 7
Marvel’s Spider-Man 2
Ratchet & Clank: Rift Apart
Horizon Forbidden West
These updates will allow players to experience their favorite games at a higher fidelity, taking full advantage of the console’s improved graphics and performance.
Design & Compatibility
Maintaining consistency within the PS5 family, the PS5 Pro retains the same height and width as the original PS5 model. Players will also have the option to add an Ultra HD Blu-ray Disc Drive or swap console covers when available.
Additionally, the PS5 Pro is fully compatible with all existing PS5 accessories, including the PlayStation VR2, DualSense Edge, Pulse Elite, and Access controller. This ensures seamless integration into your current gaming setup.
Pricing & Availability
The PS5 Pro will be available starting November 7, 2024, at a manufacturer’s suggested retail price (MSRP) of:
$699.99 USD
$949.99 CAD
£699.99 GBP
€799.99 EUR
¥119,980 JPY
Each PS5 Pro comes with a 2TB SSD, a DualSense wireless controller, and a copy of Astro’s Playroom pre-installed. Pre-orders begin on September 26, 2024, and the console will be available at participating retailers and directly from PlayStation via direct.playstation.com.
The launch of the PS5 Pro marks a new chapter in PlayStation’s commitment to delivering cutting-edge gaming experiences. Whether players choose the standard PS5 or the PS5 Pro, PlayStation aims to provide the best possible gaming experience for everyone.
Preorder your PS5 Pro and step into the next generation of gaming this holiday season.
