GameStop, the world's largest video game retailer, will be reportedly closing down 200 of its stores which are generating loss. This is despite the high success of game titles like Halo 4 and Call of Duty: Black Ops 2; the video game retail industry is not doing well.
The U.S.-based retailer posted "losses despite their shift towards digital game sales and having a strong foothold on physical game sales," Ripten reported.
The third-quarter financial results of GameStop have showed the company lost $624 million from a profit of $53.9 million in the year-ago period. The company shares fell to $1.77 billion from $1.95 billion.
"Diligent operational efforts in a tough video game market as well as continued margin expansion of 200 basis points resulted in third quarter earnings exceeding expectations," the company said, as reported by MarketWatch. "We are now focused on delivering a successful holiday quarter driven by great titles, an unrivalled loyalty program, exciting new businesses, and the Wii U launch."
There was an 8.3 percent decrease from the previous year, both in hardware and software sales. GameStop has over 6,000 locations in U.S., and an annual revenue of over $1 billion.
"The longevity of the current console cycle and the difficult comparison of major new software titles released during the third quarter of 2012," explained J. Paul Raines, CEO GameStop, were the reasons for downturn.
GameStop has made forays into the digital and mobile media and this endeavor has worked well, as the company has fared better, with a 31 percent increase in 2012.
Analysts have predicted that the future of the gaming industry will be largely digital.
GameStop, though, is optimistic that Nintendo's Wii U will help in an upswing in terms of finances for the company.
It has not yet been confirmed which stores will be shut down and no timeframe has been given for their closure.