GameStop sells video games, gaming hardware, accessories, and collectibles through roughly 2,200 physical stores and its ecommerce sites. Customers can also trade in their old games, consoles, and trading cards at the store counter in exchange for cash or credit. That trade-in program feeds a separate stream of used-product sales. At the same time, GameStop is quietly becoming something else: a company sitting on billions of dollars in cash that it wants to put to work through acquisitions and investments, including Bitcoin. The diagram below traces where the money goes.
Five years of data tell a clear story about what is happening to the retail side of GameStop. Revenue has fallen every single year, dropping from $6.0 billion in fiscal 2022 to $3.6 billion in fiscal 2026. That is a 40% decline in four years. Software sales are the main culprit. People are downloading games instead of buying discs, and that trend is not reversing. Hardware sales are falling too.
But the gross margin tells a different story. Even as revenue shrinks, GameStop is keeping more profit from each dollar it does collect. Gross margin rose from 22.4% in fiscal 2022 to 33.0% in fiscal 2026. The reason is collectibles. Trading cards, toys, apparel, and pop culture merchandise now make up 29% of total sales, up from a much smaller share just two years ago. Collectibles carry higher margins than software or hardware. Closing hundreds of low-performing stores and exiting countries like Canada and Germany also cut costs sharply. Selling, general, and administrative expenses dropped by $220.2 million in fiscal 2026 alone.
The cash flow picture also improved. GameStop burned through cash in fiscal 2022 and fiscal 2024, but generated $614.8 million in operating cash flow in fiscal 2026. A big chunk of that came from interest earned on the company's enormous cash pile. GameStop raised approximately $4.2 billion through convertible notes during fiscal 2026, notes that carry a 0% interest rate. It then placed that cash into government securities and money market funds, collecting $271.5 million in interest income. That interest income now rivals the profit from selling games and collectibles.
GameStop also purchased 4,710 Bitcoin for $500 million during fiscal 2026. It then entered into a covered call arrangement with Coinbase Credit, pledging almost all of that Bitcoin as collateral. The accounting treatment required GameStop to record a $131.6 million loss on those digital assets in fiscal 2026. The Bitcoin position adds meaningful financial risk on top of the already uncertain retail business.
Several specific risks are documented in the company's own filings. The company's fulfillment, refurbishment, and support operations all run through a single facility in Grapevine, Texas. A fire, flood, or major disruption there could halt the ability to serve customers. The company depends heavily on Chief Executive Officer and Chairman Ryan Cohen. If shareholders do not approve a planned stock option award for Mr. Cohen, or if he were to leave, the filing states this could seriously impair the company's ability to execute its strategy. The Bitcoin holdings can lose value rapidly, and a forced sale during a market downturn could harm the company's financial position. There is also a regulatory risk: if Bitcoin and other securities holdings exceed 40% of total assets, GameStop could be classified as an investment company under federal law, which would impose strict restrictions on how it operates.