GameStop is going to close about 150 of its stores this year in the wake of slumping holiday sales, according the company’s earnings report on Thursday.
The move targets non-productive stores in a strategy announced more than three years ago, GameStop told Fortune in a statement. GameStop’s earnings report says it will close between 2 and 3 percent of its stores worldwide. It has more than 7,500 locations in 14 countries currently.
However, GameStop said it would open another 35 stores in its collectibles line of business and 65 new “technology brands” stores (which include Spring Mobile AT&T and Cricket Wireless stores).
But in traditional video game hardware and software, where GameStop has long been king, the company took a beating to close out 2016.The company’s earnings release showed new software sales down 19.3 percent for the fourth quarter, which ended Jan. 28, and new hardware sales down 29.1 percent. Taken with the launch of two new PlayStation 4 configurations and PlayStation VR from September to November, the hardware decline is remarkable.
For its part, GameStop said it was hurt by “aggressive console promotions by other retailers on Thanksgiving and Black Friday,” the company said. Amazon as well as big-box retailers like Walmart, Best-Buy, Toys R Us and Target, have posed an increasing threat to GameStop’s sales position.
GameStop also blamed “weak sales of certain AAA titles,” for the drop in software sales. While none were named, in Activision’s call with investors in early February, the publisher acknowledged that Call of Duty: Infinite Warfare had “underperformed.” In December, CNBC reported, citing subscriber-only data from NPD, that sales of physical copies of Infinite Warfare in November were down 50 percent from the November 2015 launch of Black Ops 3.The outcome for GameStop’s stock price in Friday trading was rather stark. Shares fell more than 13 percent, or $20 in whole numbers. CNBC noted that GameStop’s share price is off more than 30 percent over the past 12 months.