After reporting weak fourth-quarter earnings, GameStop announced it intends to shutter at least 150 of its 7,500 stores worldwide. The company's shares slid more than 12% in afternoon trading Friday.
GameStop reported a 13.6% drop in global sales to $3.05 billion compared to a year ago. The company blamed weak sales of certain blockbuster games during the holiday period and "aggressive console promotions" from its competitors. The company saw a 29% drop in new hardware sales while new software sales fell by 20%.
GameStop's struggles with video game sales come as the company faces increased competition from competitors such as Amazon, Best Buy, and Walmart. In addition, more players are purchasing games online, whether for traditional consoles or for mobile devices like smartphones and tablets.
While video game sales fell, Gamestop reported a 44% sales increase in its Technology Brands business, which includes cellphone retailers such as Spring Mobile. The company's Collectibles business also saw growth of 28% due to strong interest in Pokémon merchandise.
Another possible boon for the company is the release of the Nintendo Switch, which GameStop indicates has continued to sell out since launch. The company also expressed enthusiasm for Microsoft's upcoming Project Scopio console.
While the company intends to close the doors of some of its video game stores, GameStop plans to open 65 Technology Brands stores and 35 Collectibles stores this year.