GameStop may be a bitcoin play, but its stock is sliding on weaker-than-expected Q1 revenue

By James RogersThe videogame retailer's shares were down more than 5% in extended trading TuesdayGameStop Corp. shares were down more than 5% in extended trading Tuesday after the videogame retailer's first-quarter revenue missed Wall Street's expectations, despite the company posting its fourth consecutive quarterly profit.GameStop (GME), which announced its first purchase of bitcoin (BTCUSD) last month, reported results after market close.Related: GameStop makes its first bitcoin buy. Here's why the stock is pulling back.The original meme stock posted sales of $732.4 million for the quarter ending May 3, down from $881.8 million in the same period last year. The average estimate among two analysts surveyed by FactSet was for revenue of $750 million.Hardware and accessories revenue was $345.3 million, down from $505.3 million in the same period last year. Software revenue declined to $175.6 million from $239.7 million, while collectibles revenue rose to $211.5 million from $136.8 million. Last year GameStop announced a collaboration with Collectors Holdings Inc.'s Professional Sports Authenticator division, which offers trading-card and autograph-authentication and grading services.GameStop earned $44.8 million, or 9 cents a share, in the quarter - improving on a net loss of $32.3 million, or 11 cents a share, in the prior year's quarter and marking the company's fourth consecutive quarterly profit.On an adjusted basis, GameStop earned 17 cents a share, beating the FactSet consensus estimate of 8 cents a share, also based on projections from two analysts.The company ended the quarter with cash, cash equivalents and marketable securities of $6.4 billion, up from $1 billion at the end of the same period last year.Related: Why GameStop is trying to be the next MicroStrategy with its bitcoin moveEarlier this year, GameStop's board unanimously approved an update to its investment policy to add bitcoin as a treasury-reserve asset - following in the footsteps of software company and bitcoin play MicroStrategy Inc. (MSTR), now doing business as Strategy.GameStop's purchase of 4,710 bitcoin tokens occurred between May 3 and June 10, the company said in a statement.Like movie-theater chain AMC Entertainment Holdings Inc. (AMC), GameStop saw its stock skyrocket during the 2021 meme-stock frenzy. However, the retailer has wrestled with declining sales in recent years, as well as intense competition from digital gaming and streaming.Related: Meme stocks were fueled by Roaring Kitty and 'Trump trades' this year. What can we expect in 2025?GameStop did not hold a conference call in conjunction with its earnings report.The company's stock was down 3.8% in 2025 as of Tuesday's close, compared to the S&P 500 index's SPX gain of 2.7%.-James RogersThis content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.