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GameStop turns a Q4 profit despite 28% dip in sales – GamesIndustry.biz

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Retailer says pandemic has increased demand; chain closed 320 stores last year and looks to close that many or more in the current year

GameStop has ended a difficult fiscal year on a mildly positive note. The retailer today announced its financial results, showing a net profit in the fourth quarter despite significant declines to its core business.

For the fourth quarter, GameStop reported a net income of $21 million while revenues were down 28% to $2.19 billion. Last year’s fourth quarter saw losses of $187.7 million on sales of $3.06 million. Sales of software, hardware/accessories, and collectibles were all down for the quarter.

For the full fiscal year, revenues were down 22% to $6.47 billion, with a net loss of $470.9 million. That’s an improvement on the previous year, when the company posted a net loss of $673 million. While hardware and software were both down considerably for the full year, the collectibles business saw a 4% jump to $737.5 million, and now represents more than 11% of GameStop’s business.

GameStop also said it benefited from “the sale of non-core business units,” like the late 2018 sale of Spring Mobile that brought in $700 million just at the tail end of that fiscal year. The company used that cash injection to pay off $401 million of debt, and spent a further $199 million of it in stock buybacks over the course of the year.

“As we begin fiscal 2020, we remain focused on our key priorities, yet recognize that we continue to face the temporary headwind of lower current generation console hardware and software sales as consumers delay purchases in anticipation of new platform launches expected later in the year,” GameStop CEO George Sherman said.

As for the company’s fiscal 2020 plans, it will continue to evaluate markets with an eye toward shutting down more locations. And despite two rounds of layoffs at its GameInformer media outlet since August, it plans to “Enhance GameInformer asset with interactive digital media,” though it didn’t specify what that would look like.

Similarly, the company said it will continue to explore new revenue model opportunities, and this year “began testing digital revenue sharing with key partners”

In light of the current novel coronavirus (COVID-19) pandemic, which has forced the closure of all stores in Canada and limited American locations to curbside pick-up of online orders, GameStop said there was too much uncertainty going forward to provide any financial guidance for the current fiscal year. However, it did say that recent weeks have seen an increased demand for the company’s products.

Update: In a post-earnings call, GameStop executives said that despite having closed or cut back operations at the majority of its global locations (except in Australia and New Zealand), the COVID-19 pandemic has actually led to a 2% increase in comparable store sales in March through last Saturday.

The company also provided an update on its efforts to “de-densify” by closing stores. Last fiscal year it shut down 321 stores, and the company plans to meet or exceed that number of closures in the year ahead.

In its earnings release, GameStop listed its current store count at more than 5,500 locations.

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Animal Crossing removed from Chinese stores after Hong Kong protests: report – Polygon

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Pro-democracy protesters in Hong Kong have been pushed inside, like many of us around the world, as the coronavirus pandemic disrupts everyday life. School, work, and other events have been moved online — including protests. Activists are using Nintendo’s new, idyllic life simulator Animal Crossing: New Horizons to support Hong Kong protesters’ five demands.

But on Friday morning, the game had disappeared from major Chinese online retailers Taobao and Pinduoduo, reports Reuters. Nintendo began selling the Switch in China in December 2019, but has not released New Horizons there; interested parties must purchase foreign versions of the game to play it. Only three games are officially available for the Switch in China: New Super Mario Bros. U Deluxe, Mario Kart 8 Deluxe, and Super Mario Odyssey.

It’s not immediately clear that New Horizons has been pulled because of the protests in-game, but the game’s removal comes after increased news coverage of the actions, popularized by Hong Kong activist Joshua Wong. Reuters also reported there’s no indication whether the game was pulled as the result of “a directive from China’s content regulator or a voluntary act by politically sensitive e-commerce platforms.”

Industry analyst Daniel Ahmad wrote on Twitter Friday that despite not being officially available there, Animal Crossing: New Horizons is “extremely popular in China.” Players were able to purchase it from online retailers, small game shops that have imported it, and by changing the Nintendo eShop location.

Demonstrations inside Animal Crossing: New Horizons include a creative use of Nintendo’s customization options. Of course, players are donning medical and gas masks — symbols of the protest — and wearing all black. But others have created signage and artwork sharing the message “Free Hong Kong, Revolution Now.” Others are using the game’s nets to bop Hong Kong leader Carrie Lam, who is widely unpopular within the pro-democracy movement.

Wong tweeted Friday that gamers in China are blaming him for New Horizons’ disappearance. Polygon has reached out to Wong for comment.

Protests in Hong Kong have been ongoing since the summer of 2019. Hongkongers are fighting for “universal suffrage” and an investigation into the Hong Kong police force, according to Vox. Last year, Hong Kong-based Hearthstone pro Ng “blitzchung” Wai Chung used a postgame interview to express support for the movement, and was subsequently suspended and fined for the action. (Blizzard later reduced the punishment.) Angry with Blizzard, supporters began boycotting the company’s products and using Chinese Overwatch hero Mei as a symbol of the resistance. Demonstrators also appeared outside of BlizzCon 2019 to protest the suspension.

Similarly, a Taiwanese horror game, Devotion, was removed from Steam last year after players found a meme mocking Chinese president Xi Jinping in-game. The game has not returned to the platform, and it is currently playable only via bootlegged copies or at the Harvard-Yenching Library in Cambridge, Massachusetts.

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Apple and Google partner on COVID-19 contact tracing technology – Apple Newsroom

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Across the world, governments and health authorities are working together to find solutions to the COVID-19 pandemic, to protect people and get society back up and running. Software developers are contributing by crafting technical tools to help combat the virus and save lives. In this spirit of collaboration, Google and Apple are announcing a joint effort to enable the use of Bluetooth technology to help governments and health agencies reduce the spread of the virus, with user privacy and security central to the design.

Since COVID-19 can be transmitted through close proximity to affected individuals, public health officials have identified contact tracing as a valuable tool to help contain its spread. A number of leading public health authorities, universities, and NGOs around the world have been doing important work to develop opt-in contact tracing technology. To further this cause, Apple and Google will be launching a comprehensive solution that includes application programming interfaces (APIs) and operating system-level technology to assist in enabling contact tracing. Given the urgent need, the plan is to implement this solution in two steps while maintaining strong protections around user privacy.

First, in May, both companies will release APIs that enable interoperability between Android and iOS devices using apps from public health authorities. These official apps will be available for users to download via their respective app stores.

Second, in the coming months, Apple and Google will work to enable a broader Bluetooth-based contact tracing platform by building this functionality into the underlying platforms. This is a more robust solution than an API and would allow more individuals to participate, if they choose to opt in, as well as enable interaction with a broader ecosystem of apps and government health authorities. Privacy, transparency, and consent are of utmost importance in this effort, and we look forward to building this functionality in consultation with interested stakeholders. We will openly publish information about our work for others to analyze.

All of us at Apple and Google believe there has never been a more important moment to work together to solve one of the world’s most pressing problems. Through close cooperation and collaboration with developers, governments and public health providers, we hope to harness the power of technology to help countries around the world slow the spread of COVID-19 and accelerate the return of everyday life.

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Amid in-game Hong Kong protests, Chinese retailers drop Animal Crossing sales – Ars Technica

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Chinese online retailers are cracking down on third-party sales of imported copies of Animal Crossing: New Horizons. The move comes as the game has become a popular virtual spot for anti-government protests amid coronavirus-induced lockdowns.

Reuters reports that popular gray market Chinese e-commerce sites Pinduoduo and Taobao have taken down all listings for Animal Crossing as of this morning. Chinese tech site Pingwest reports that the two retailers sent messages to their resellers late Thursday notifying them of the ban. The Chinese government hasn’t issued a statement regarding the game, though a directive from government officials seems the most likely reason for the sudden move.

A licensed Chinese version of the Switch launched late last year through local partner Tencent after the lifting of an outright game console ban in 2015. That version of the system can currently play three Mario-themed games officially licensed for the Chinese market, as well as imported international Switch cartridges, but it can’t access the system’s online features.

But many Chinese gamers have taken to importing fully featured international versions of the system through online resellers. Import prices for those consoles, and for accessories like Ring Fit Adventure, have skyrocketed on Chinese retail sites in recent weeks, mirroring supply shortages in other markets.

As industry analyst Daniel Ahmad notes on Twitter, sites like Taobao have officially banned third-party sales of imported video games since 2017. But that ban is usually lightly enforced and only becomes operative if, as Ahmad puts it, “the game has content or user-generated content that is deemed to be too offensive or violent” or “the game has become very popular and caught the attention of regulators.”

No censorship on this island

Both of those issues seem to apply to Animal Crossing. In recent weeks, the game has become a popular virtual location for pro-democracy protesters who have seen coronavirus restrictions limit their ability to host crowded street protests. Offline players can create elaborate signs, clothing, and other imagery that can, and is, easily shared on social media, as you can see in the above gallery. Online players, meanwhile, can invite other users to their islands to take part in virtual protest actions in miniature.

Animal Crossing is a place without political censorship, so it is a good place to continue our fight,” pro-democracy activist Joshua Wong told Wired UK earlier this week. “Even lawmakers in Hong Kong are playing this game,” he added.

While these online retail restrictions seem to be stricter than normally applied for the Chinese market, they fall well short of a full-fledged ban of the game. Imported systems can still download the title from Nintendo’s eShop by easily setting up an international account, and some brick-and-mortar retailers may also sell the imported cartridge. Some online resellers also seem to be avoiding the restrictions with listings that don’t mention the game by name in order to arrange a sale through private messaging.

China has not yet taken the more extreme step of blocking direct access to Nintendo’s online servers from the country. That would block downloads of Animal Crossing and other Switch games as well as online play for imported systems, though players could potentially get around that with a VPN. Such a major move could anger Chinese Switch gamers whose imports have been treated mostly with benign neglect thus far. It also could anger Nintendo and imperil the company’s lucrative arrangement with Tencent, which is sharing in millions of official console sales in the country.

China’s Ministry of Culture has long put forward restrictions on games that pose a “serious threat to the moral standards of society,” as it put things when banning Mafia-related games in 2009. More recently, pandemic-simulation game Plague Inc. was removed from the Chinese iOS App Store because it “includes content that is illegal in China as determined by the Cyberspace Administration of China.”

Listing image by Joshua Wong

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