GameStop reported a 14% decline in Q4 revenue, which dropped to $1.10bn from $1.28bn a year earlier. This contraction reflects the challenges facing the physical retail model as digital downloads, streaming, and subscription services gain momentum. Publishers are increasingly prioritizing these channels, diminishing the role of traditional brick-and-mortar stores in the video game distribution chain. Against this backdrop, GameStop shares fell 1% in trading.

To preserve profitability, the company has implemented cost-cutting measures, with selling, general, and administrative expenses falling to $241.5m from $282.5m a year ago. GameStop is also attempting to diversify its business, notably by betting on trading cards and collectibles, which have become a key pillar of its strategy.

Sales of hardware and accessories were particularly badly hit, tumbling to $535.6m from $725.8m the previous year. Nevertheless, the group posted a net income of $127.9m, slightly below the previous year's figure. Furthermore, GameStop announced that it is considering the sale of its operations in France and is set to submit a compensation plan to shareholders that could reach $35bn for its CEO.