GameStop's New Record Has Nothing to Do With Games

Remember when GameStop was the go-to spot for the latest game releases? Those days are long gone. The company just posted its best Q2 operating income since going public in 2002, and you can thank Funko Pops and trading cards for that—not video games.

In its latest earnings report, GameStop revealed a whopping $160.2 million in operating income for the quarter ending August 1. That's a record for the company. Net income also soared to $298.7 million, up from $168.6 million last year. But here's the kicker: total net sales actually dropped from $972.2 million to $790.2 million. So how did they make more money while selling less? It's all about what they're selling.

Collectibles—think statues, plushies, and rare cards—are now GameStop's biggest money-maker. Net sales in that category jumped 57% year-over-year to $356.3 million, making up 45.1% of total sales. If you've stepped into a GameStop lately, you've probably noticed the shelves are packed with merch, not games. That's intentional.

The video game category, which includes new software, brought in $263.2 million, down sharply from $494.6 million last year. That drop is partly because last year saw the Switch 2 launch, which gave sales a temporary boost. Pre-owned and refurbished items also took a hit, falling to $170.7 million from $250 million. Physical games are becoming less relevant, and GameStop knows it.

CEO Ryan Cohen has been upfront about this shift. He's called physical game sales "irrelevant" and hinted at expanding into TikTok-style live commerce and even a marketplace for digital gaming items. That's a far cry from the store you grew up with, but it's working.

GameStop also tightened its belt, cutting selling, general, and administrative costs to $187.1 million from $218.8 million. And they're feeling optimistic: they've raised their adjusted EBITDA forecast to $650 million for fiscal 2027, up from $600 million.

But not everything is rosy. The company's share price took a tumble after the report, and their attempt to buy eBay has been rejected by eBay's board—twice. GameStop owns over 43 million shares of eBay, worth about $4.9 billion, so they're not backing down easily.

So, next time you're in a GameStop, don't be surprised if the cashier asks if you're there for the latest Pokémon card drop instead of the new Call of Duty. Will you be picking up any collectibles, or are you still mourning the death of physical games? Let us know in the comments!