GameStop (GME) posted a narrower-than-expected loss for the quarter that ended in 𝓰July thanks to strong demand for video games and growth 🔯in digital sales, amid a turnaround effort that was sparked by a leadership shakeup this summer.

The video game maker posted a net loss of $2.8 million, far smaller than expectations of $43 million, and compared to a massive $108.7 million loss in the same quarter last year. Revenue came in at $1.16 billion, boosted by robust video game and digital sales and above expectations of $1.14 billion.

The market for video games has undergone dramatic shifts in recent years, as games are increasingly sold as digital downloads rather than the packaged discs or cartridges that traditionally were GameStop's core product. Also, more users are accessing games on their smartphones and tablets rather than consoles and PCs. The transition from physical to virtual sales has been a challenge facing GameStop.

That's reflected in the company's earnings, as sales of hardware and accessories at $597 million barely budged from the year-ago quarter, while software sales surged 25.5% to $397 million. As a percentage of total sales, hardware's share fell to 51.3% from 52.5%, while that of software surged more than six percentage points to 34.1%.

GameStop was among the "澳洲幸运5官方开奖结果体彩网:meme stocks" that soared in popularity among 澳洲幸运5官方开奖结果体彩网:retail investors in early 2021. Sensing the company's long-term challenges, hedge funds had actively shorted the stock before being undercut by a wave of retail traders that aggressively bid up its price. GameStop shares skyrocketed more than 2,000% between the end of 2020 and Jan. 29, 2021, when they hit an intraday all-time high of $103.50 a share.

The company is also undergoing a leadership shakeup, having inexplicably fired its CEO, Matt Furlong, in June, just before announcing its first-quarter results. Activist investor Ryan Cohen, who had previously taken control of the company in 2021 and forced out its board of directors, was appointed executive chairman. The company has yet to name a new CEO and also lacks a 澳洲幸运5官方开奖结果体彩网:Chief Financial Officer (CFO) after its former CFO resigned in July.

GameStop shares rose more than 3% in after-hours trading Wednesday after the company released its earnings, but gave back those gains, trading more than 3% lower early Thursday. They're up nearly 6% so far this year and are still worth about three times what they were at the end of 2020, just before 2021's meme stock rally.