Bitcoin Gains Power GameStop's Turnaround, Retail Struggles Linger

GameStop Corp. reported a significant narrowing of its second-quarter loss for fiscal 2025, driven by unrealized gains on its Bitcoin holdings and reduced operating costs, according to its financial results released in late August 2025. The company, which has increasingly ventured into digital assets under Chairman Ryan Cohen’s leadership, disclosed a net income of $168.6 million for the three months ended August 2, compared to a net income of $14.8 million in the same period the prior year. This improvement was largely attributable to a $28.6 million unrealized gain on its Bitcoin investment.

During the quarter, GameStop purchased 4,710 Bitcoin at a total cost of $500 million, bringing its digital asset portfolio to a reported fair value of $528.6 million as of quarter-end. The company uses Coinbase pricing for valuing its holdings each reporting period. This strategic move aligns with a broader corporate initiative to diversify its investment portfolio, though it also exposes the company to the inherent volatility of the cryptocurrency market. Bitcoin’s price has risen roughly 18% since early May, contributing to the increased carrying value of the holdings.

Financially, GameStop’s operating income reached $66.4 million in the second quarter, a stark turnaround from a $22.0 million operating loss in the prior year period. The improvement was supported by a 11.3% reduction in selling, general, and administrative (SG&A) expenses, which declined to $218.8 million from $270.8 million a year earlier. Additionally, the company’s cash, cash equivalents, and marketable securities rose to $8.7 billion at the end of the second quarter, compared to $4.2 billion in the prior year.

Despite the gains, the company’s core retail operations saw a slight decline in revenue. Total net sales fell to $972.2 million for the quarter, down from $798.3 million in the prior year. Hardware and software sales, which combined accounted for 76.6% of total sales in the quarter, saw a decrease compared to the previous three months. However, collectibles—such as trading cards and pop-culture merchandise—remained a bright spot, contributing nearly a third of total sales and showing resilience in the face of broader retail challenges.

GameStop has also been reshaping its business structure, including the divestiture of international operations in Canada and France during the quarter. The company raised $2.7 billion through a convertible bond offering earlier this year, further strengthening its liquidity position. The firm ended the quarter with $6.1 billion in cash and equivalents, excluding its Bitcoin holdings.

The company’s non-GAAP financial measures, including adjusted net income and adjusted operating income, also showed marked improvement, reflecting the impact of cost reductions and the unrealized gains on Bitcoin. Adjusted net income for the quarter was $138.3 million, compared to $5.2 million in the prior year. These figures, while non-GAAP, provide a clearer view of the company’s core operational performance by excluding items such as asset impairments and unrealized gains.

GameStop’s decision to enter the crypto space continues to draw attention, particularly as it joins a small but growing list of publicly traded firms that have allocated portions of their balance sheets to Bitcoin. The company’s reported Bitcoin holdings represent one of the largest corporate bets on the cryptocurrency in recent years. While this strategy offers the potential for substantial upside, it also introduces volatility into its financial statements, as crypto values can fluctuate rapidly.

Shares of GameStop rose by 1.5% during regular trading hours and gained as much as 5.7% to $24.94 in after-hours trading following the earnings release, indicating positive investor sentiment toward the company’s financial recovery and strategic direction.