GameStop (GME.N) announced on Tuesday that its board has approved the addition of bitcoin as a treasury reserve asset, a move that mirrors the strategy of corporate bitcoin giant MicroStrategy (MSTR.O). The decision highlights GameStop’s shift toward embracing cryptocurrency as a core component of its business operations.
GameStop’s Strategic Shift Toward Bitcoin
The move to add bitcoin to its treasury comes shortly after a similar rebranding by MicroStrategy, which removed “Micro” from its name in February to emphasize its focus on the cryptocurrency. MicroStrategy, known for being the largest corporate holder of bitcoin, has integrated the cryptocurrency into the heart of its operations.
GameStop has stated that it will use a portion of its cash, future debt, or equity issuances to invest in bitcoin, though it did not specify the maximum amount it plans to acquire. This strategic shift follows a broader push to diversify the company’s financial strategies in the face of continued challenges in its core retail business.
Performance and Challenges in Retail Business
Despite the addition of bitcoin to its reserves, GameStop continues to face difficulties in its primary business of retailing videogame hardware and merchandise. The company reported a significant rise in fourth-quarter profit, which more than doubled to $131.3 million from $63.1 million the previous year, largely due to cost-cutting efforts. GameStop also posted quarterly revenue of $1.28 billion, down from $1.79 billion in the same period last year.
The company, which became a focal point during the “meme stock” trading craze, has struggled with the shift toward digital downloads, game streaming, and e-commerce, contributing to a decline in physical retail sales.
Future Outlook and Store Closures
In response to these challenges, GameStop has aggressively reduced its retail footprint, closing 590 stores in the U.S. in fiscal 2024. The company expects to close a “significant number” of additional stores in fiscal 2025 as part of its ongoing efforts to streamline operations and adapt to the changing gaming landscape.
Broader Cryptocurrency Adoption and Strategic Moves
GameStop’s decision to invest in bitcoin aligns with broader trends of increasing institutional adoption of cryptocurrencies. This move follows U.S. President Donald Trump’s recent executive order to establish a strategic reserve of cryptocurrencies, further reflecting growing interest in digital assets.
