GameStop Bounces Back With $21 Million Q4 Profit

No wonder GameStop tried to call itself an “essential business” and didn’t want to shutter stores during the coronavirus pandemic.

The world’s largest video game retail chain March 26 reported a fourth-quarter (ended Feb. 1) profit of $21 million, compared with a loss of $188 million during the previous-year period. Revenue dropped 28% to $2.2 billion from $3 billion as the industry grapples with a lack of new-generation video game consoles slated to launch later this year.

For the fiscal year, GameStop, which operates about 5,400 stores, narrowed its net loss about 30% to $471 million from $673 million last year. Notably, the chain’s collectables segment saw a 10% decline to $245 million from $270 million.

“We delivered profitability, on an adjusted basis, ahead of our updated expectations, marking progress on our strategy to evolve our operating model and position GameStop for long-term profitable growth,” CEO George Sherman said in a statement. “We accomplished this, despite industry challenges that led to an expected significant decline in sales.”

Sherman said the chain improved efficiency and effectiveness across the company, including a $130 million reduction in adjusted SG&A expense, reductions in inventory, accounts payable and debt.

“We accelerated our digital capabilities by elevating our web platform and further optimizing our retail footprint through market de-densification, while setting up a laboratory in our Tulsa, Okla., market to test experiential elements in 12 stores with promising initial results.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

GameStop also spent $199 million repurchasing shares. Wall Street approved, sending the stock up 9% in after-market trading. Shares finished up nearly 6% to close at $4.41 per share.

Regardless, GameStop has shuttered most stores to foottraffic, with sales limited to curbside pick-up and ecommerce. GameStop has temporarily halted in-store game trades and sales.

Notwithstanding the Q4 results and upcoming console launches, GameStop finds itself one of many victims of the global COVID-19 pandemic, according to media analyst Michael Pachter with Wedbush Securities in Los Angeles.

“We expect the pandemic to have largely passed by the end of July, and have not adjusted our models materially for periods after the second quarter,” Pachter wrote in a March 27 note. “While we are quite optimistic that the company will return to profitability in the fall, the effects of the pandemic may linger beyond the time frame we have modeled, putting our estimates at risk.”

Amazon Hits a Fiscal Grand Slam With 2019 Surge

Amazon had a “prime” fourth quarter and fiscal year (ended Dec. 31, 2019) across all its business units, including subscription services. The segment, which includes annual and monthly fees associated with Prime memberships, as well as audiobook, digital video, digital music, e-book, and other non-AWS subscription services, generated more than $5.2 billion in revenue. That was up 32% from services revenue of $3.95 billion during the previous-year period.

On the home entertainment front, Amazon Original series “Hunters” will premiere on Feb. 21. Produced by Academy Award-winner Jordan Peele and starring Academy Award-winner Al Pacino, “Hunters” follows a diverse band of Nazi hunters living in 1977 New York City.

Follow us on Instagram

In the quarter, Prime Video debuted several Original series and movies, including The Report, The Aeronauts, “The Kacey Musgraves Christmas Special,” The Expanse, as well as the return of “The Marvelous Mrs. Maisel,” “Tom Clancy’s Jack Ryan,” and the final season of “The Man in the High Castle.”

Amazon Studios received eight Golden Globe Award nominations, with “Fleabag” winning Best Television Series, Musical or Comedy, as well as Best Performance by an Actress in a Television Series, Musical or Comedy, for Phoebe WallerBridge.

Amazon Music topped more than 55 million customers worldwide in the quarter. Collectively, in the U.S., U.K., Germany, and Japan, Amazon Music customers have grown nearly 50% year-over-year; and in newer marketplaces France, Italy, Spain, and Mexico, Amazon Music customers more than doubled in 2019. Additionally, Amazon Music Unlimited subscribers grew more than 50% in 2019. •

On the streaming media device front, Fire TV now has more than 40 million active users worldwide. Amazon announced the new Fire TV Edition at CES 2020, which includes a set of tools, features, and services that make it even easier for developers, operators, device makers, and manufacturers to integrate Fire TV into their products. BMW and Fiat Chrysler Automobiles are among the first automakers to introduce Fire TV in their future vehicles.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Founder/CEO Jeff Bezos lauded the results and company for the fourth quarter and fiscal-year results.

Indeed, Amazon hit it out of the park in the quarter and fiscal year. Net sales increased 21% to $87.4 billion in the quarter, compared with $72.4 billion in fourth quarter 2018. Excluding the $120 million unfavorable impact from year-over-year changes in foreign exchange rates throughout the quarter, net sales increased 21% compared with fourth quarter 2018.

Operating income increased to $3.9 billion in the quarter, compared with operating income of $3.8 billion in fourth quarter 2018. Net income increased to $3.3 billion in the quarter, compared with net income of $3 billion in fourth quarter 2018.

For 2019, net sales increased 20% to $280.5 billion, compared with $232.9 billion in 2018. Excluding the $2.6 billion unfavorable impact from year-over-year changes in foreign exchange rates throughout the year, net sales increased 22% compared with 2018.

Operating income increased to $14.5 billion, compared with operating income of $12.4 billion in 2018. Net income increased to $11.6 billion, or $23.01 per diluted share, compared with net income of $10.1 billion, or $20.14 per diluted share, in 2018.

“Prime members watched double the hours of original movies and TV shows on Prime Video this quarter compared to last year, and Amazon Originals received a record 88 nominations and 26 wins at major awards shows,” Bezos said in a statement. “A huge thank you to teams across Amazon for their dedicated work to build, innovate, and deliver for customers this [winter] holiday.”

Aggressive Marketing Drives Barnes & Noble’s Upbeat Winter Holiday Sales

Books can be a big seller if marketed correctly — especially during the winter holidays. Barnes & Noble apparently got the memo.

The national bookseller March 7 reported third-quarter (ended Jan. 26) net income of $66.9 million, marking a significant fiscal turnaround for the chain, which posted a loss of $63.5 million during the previous-year period. Revenue was flat at $1.23 billion.

Subscribe HERE for FREE Daily Newsletter!

Meanwhile, the Nook segment, which includes electronic readers and tablets, in addition to digital content (movies, TV shows, music), saw revenue decline 22% to $24.3 million from $30.9 million last year. The operating loss increased 330% to $4.3 million from a loss of $1.3 million.

“In fiscal 2019, we have been focused on growing the top line, which contributed to our best holiday in years,” Len Riggio, founder and chairman, said in a statement. “Sales benefited from our new ad campaign, increased marketing and promotions, and an improved omni-channel experience for our customers. We believe these efforts are laying the foundation for sustained growth.”





Dish Network Lost 1.1M Satellite Subs in 2018; Sling TV Growth Cools

Dish Network, the fourth largest pay-TV operator in the country, Feb. 13 said it lost 1.1 million legacy satellite TV subscribers in the fiscal year ended Dec. 31, 2018. The company lost 995,000 satellite subs in 2017.

Dish ended 2018 with 9.9 million satellite subs, compared to 11 million at year-end 2017.

Subscribe HERE for FREE Daily Newsletter!

The company said its pioneering online TV service Sling TV added 205,000 subscribers last year – down 72% from 711,000 subscriber additions in 2017. Sling added 878,000 subs in 2016. The standalone streaming service finished 2018 with 2.41 million subs compared to 2.21 million in 2017.



Verizon Lost 168,000 Fios TV Subs in 2018

Verizon Communications Jan. 29 reported it lost 46,000 Fios TV subscribers in the fourth quarter (ended Dec. 31, 2018), reflecting the ongoing secular shift from traditional linear pay-TV to over-the-top video offerings. The telecom lost 29,000 video subs in the previous-year period.

Verizon ended 2018 with 4.45 million Fios Video subscribers, down 3.6% from 4.61 million subs at the end of 2017.

“We expect legacy product revenue to continue to decline in 2019 at rates consistent with last year,” CFO Matt Ellis said on the fiscal call.

Meanwhile, Verizon added 217,000 broadband subscribers – underscoring consumer demand for high-speed Internet service in an era of online TV and OTT video services such as Netflix, Amazon Prime Video and Hulu.

The telecom also continues to push 5G, the next-generation faster mobile network technology. The company (along with AT&T) claimed the first commercial and residential rollouts of 5G networks, despite the limited supply of compatible 5G smartphones on the market.

“As we head into 2019 and the 5G era, we’re beginning a period of transformational change,” CEO Hans Vestberg said in a statement. “We are laser focused on delivering customers a best-in-class and game-changing experience on our networks.”


Comcast Cable Lost 344,000 Video Subs in 2018

Comcast Cable Jan. 23 disclosed it lost 344,000 pay-TV subscribers in 2018, which was nearly 85% more than the 186,000 subs lost in 2017.

In the fourth quarter (ended Dec. 31), Comcast lost 19,000 video subs compared to 38,000 subs in the previous-year period.

The losses underscore ongoing secular changes in the industry as consumers opt for alternative home entertainment distribution channels, including over-the-top video services such as Netflix, Amazon Prime Video and Hulu, and online TV platforms such as Sling TV and DirecTV Now.

Indeed, Xfinity X1, Comcast’s Web-based set-to platform, has added direct access to Netflix, Prime Video and YouTube to keep pay-TV subs.

The subscriber losses also impacted sales of digital movies and TV shows. Video revenue decreased 1.8% to $22.4 billion from $22.8 billion, primarily reflecting a decrease in the number of residential video customers.

Comcast, which doesn’t have standalone online TV or OTT video platforms, does benefit as one of the nation’s largest Internet service providers. The company added 1.23 million high-speed Internet subs in 2018 compared to 1 million net additions in 2017.

High-speed Internet revenue increased 9.3% to $17.1 billion from $15.7 billion, driven by an increase in the number of residential high-speed internet customers and rate adjustments.

Corporate CES Brian Roberts said he was pleased by the “strong” operational and financial results, including the 13th consecutive year of more than 1 million broadband net additions.

In addition, with the closing of the acquisition of British satellite TV operator Sky, Roberts said Comcast has transformed into a global company.

Indeed, Sky revenue increased 2.4% to $5 billion in the fourth quarter. Excluding the impact of currency, revenue increased 5.6%, reflecting higher direct-to-consumer, content and advertising revenue.

Direct-to-consumer revenue increased 4% to $4 billion, driven by improved product penetration for pay-TV, growth in Sky Mobile and Sky Fibre customers, as well as rate adjustments in the U.K.

The quarter’s average direct-to-consumer revenue per customer relationship increased by about 1%. Content revenue increased 35.7% to $363 million, primarily reflecting the wholesaling of sports programming, including exclusive sports rights recently acquired in Italy and Germany, increased penetration of premium sports and movie channels on third party pay-TV networks in the U.K. and monetization of our slate of original programming.

“[We] are excited about its future and the potential of our combined company in 2019 and beyond,” Roberts said in a statement.




Barnes & Noble Nook Narrows Fiscal Loss

National bookseller Barnes & Noble June 21 reported that its Nook unit generated a fourth-quarter (ended April 28) operating loss of $1.5 million, compared to an operating loss of $7.9 million during the previous-year period. Revenue declined 22% to $25 million from $31.9 million last year.

The Nook segment, which includes electronic readers and tablets, in addition to digital content sales, was the lone bright spot for Barnes & Noble. The last-standing national bookstore chain continues to grapple with a changing consumer inundated with online entertainment, books and ecommerce.

Net income ballooned to $21 million on revenue of $786 million. That compared with a loss of $13.4 million and revenue of $821 million last year.

“In fiscal 2018, we developed a long-term strategic turnaround plan, which we continue to execute,” CEO Demos Parneros said in a statement. “Our plan, which includes sales improvements and cost reductions, is expected to yield immediate improvement in fiscal 2019, resulting in [pre-tax earnings] of $175 million to $200 million, and further benefits in the following years.

Indeed, excluding non-recurring or unusual charges in both years, consolidated pre-tax earnings topped $6.7 million in Q4, as compared to $5.6 million a year ago, and $145.4 million in fiscal 2018, as compared to $187.2 million a year ago.

The company reduced expenses by $15 million in the quarter and $52 million for the full year, excluding non-recurring or unusual charges.

“Turnaround plans take time; and while our performance has been somewhat disappointing, we began to make steady progress in fiscal ’18,” said Parneros.

MGM Studios Q1 Home Entertainment Revenue Plummets

Limited to catalog releases, MGM Studios Home Entertainment reported first-quarter (ended March 31) global revenue of $19.1 million, down 40% ($12.8 million) from revenue of $31.9 million for the previous-year period.

Home entertainment revenue for the prior-year quarter primarily included worldwide electronic sellthrough revenue for The Magnificent Seven and Ben-Hur, plus ongoing revenue from Spectre, the “Hobbit” trilogy, Creed and library content.

On the bright side, home entertainment revenue from television content topped $10.5 million, up $2 million (23.5%) from revenue of $8.5 million for the previous-year period.

The increase was primarily driven by the continued strong home entertainment sales of season 1 of “The Handmaid’s Tale,” which streams exclusively on Hulu.

MGM distributes its content via several major studios, including 20th Century Fox Home Entertainment for Spectre, SkyfallDeath Wish, Every Day, RoboCop, “Vikings,” “Get Shorty,” “The Handmaid’s Tale” and “Teen Wolf,” among others,as well as certain EST distribution rights feature films and television content. MGM’s agreement with Fox expires June 30, 2020.

Sony Pictures Home Entertainment distributes the “Jump Street” franchise and The Magnificent Seven; Warner Bros. Home Entertainment is the physical home entertainment distributor for the “Hobbit” trilogy, Creed, Max, Me Before You, Tomb Raider and Everything, Everything.

Fox is the physical home entertainment distributor for Poltergeist; and Paramount Home Media Distribution is the physical home entertainment distributor for Sherlock Gnomes and Ben-Hur.

TiVo Leaving Legacy Set-Top Box Business

TiVo, which helped create the digital video recording business, May 10 revealed it is transferring manufacturing, sales and distribution of legacy set-top boxes to a third party.

The unnamed partner will be responsible for all TiVo product sales outside the company’s website, including Amazon and Best Buy, CEO Enrique Rodriguez said on a fiscal call.

“This quarter saw the last MSO hardware revenue as we completed fulfillment of orders made last year,” Rodriguez said. “Once we complete this transition, we still will have direct consumer hardware sales through which we will be fulfilling through this box manufacturer.”

The CEO said that future hardware sales would be facilitated through the partner, with TiVo acting as a distribution channel. The change should have little impact on consumers.

“Basically, the consumer will continue seeing a TiVo-branded device … with TiVo software that they have known over the years,” Rodriguez said.

He said Amazon and Best Buy are better suited to sell hardware than TiVo, which was acquired by Rovi Corp. in 2016, with Rovi assuming the TiVo corporate name.

“We’re very confident in [the partner’s] ability to succeed there,” Rodriguez said.

Indeed, TiVo generated the bulk of first-quarter (ended March 31) revenue ($189.8 million) from licensing, services and software ($186.1 million), with hardware generating $3.6 million. The tallies trailed year-over-year total revenue ($205.7 million), licensing, services and software ($190.5 million) and hardware ($15.2 million).

TiVo is also exiting so-called non-core revenue channels, including Legacy TiVo Time Warp IP deals, hardware and analog products. Indeed, non-core revenue declined $25.7 million in the quarter compared to the previous-year period.

Finally, TiVo cut its fiscal loss in half to $17.7 million from $34.6 million last year.

Nintendo Wants to Again Catch Smartphone Game Lightning

Nintendo re-energized its brand relevance in 2017 with the launch of Switch, the seventh major game console developed by the venerable Japanese manufacturer.

Now, incoming CEO Shuntaro Furukawa wants to recapture the Pokémon Go smartphone game craze of 2016 (co-created with Niantic) with a new platform of smartphone apps. Pokémon Go generated $950 million in revenue, of which Nintendo got a 19% cut of total revenue.

“From what I can see, smartphone games are the ones I want to expand the most,” Furukawa told Nikkei Asian Review.

While Furukawa may be swinging for the digital fences, Nintendo concluded fiscal year 2018 (ended March 31) with a physical media grand slam thanks to Switch and related legacy software.

The company reported $9.1 billion in revenue, more than double the $4.5 billion in fiscal 2017. Profit ballooned 36% to $1.3 billion from $940 million.

Hardware sales (thanks to Switch) represented 65.4% of revenue compared to 54% of revenue in 2017. Software represented 85% of sales compared to 87% last year.

More importantly, digital revenue, which included downloadable versions of packaged software, download-only software and add-on content, generated $557 million, or 17% of sales, compared to $298 million (15%) in 2017.

“The idea that something will emerge [in mobile] that transforms into something big, in the same manner as game consoles, is the defining motive of the Nintendo business,” said Furukawa.