GameStop Now Makes More Money From Funko Pops Than From Video Games

GameStop Now Makes More Money From Funko Pops Than From Video Games

Collectibles overtakes software as GameStop’s top revenue source

GameStop’s collectibles division, not its software business, is now the company’s largest revenue category. That shift, confirmed in the retailer’s latest quarterly results, is a real break from three decades of building the chain’s identity around selling physical games. According to GameSpot, GameStop now generates more revenue from collectibles than from videogames, and the outlet describes the company posting a financial record “no thanks to games.”

The category includes trading cards, toys, apparel, and licensed merchandise tied to franchises like Pokemon and Funko. GameStop has sold collectibles alongside games for years, but the division’s growth has outpaced every other part of the business by a wide margin, pushing it past software as the single largest contributor to quarterly revenue.

The Q2 numbers: record operating income despite falling sales

GameStop’s total revenue fell nearly 20% in the second quarter, yet the company reported record operating income and beat Wall Street’s revenue expectations, according to Benzinga. A shrinking top line paired with improved profitability is an unusual combination, and it comes down to which categories are growing and which are shrinking within that smaller total. GameStop also updated its fiscal 2026 guidance after the release, and the stock rose on the news, according to Benzinga’s report on why GameStop shares were surging.

Software and hardware declines versus 57% collectibles growth

Software and hardware sales, GameStop’s traditional core business, both slumped during the quarter. Collectibles, meanwhile, grew 57%, according to a report cited by StockAnalysis.com covering GameStop’s second-quarter performance. That growth rate, against declining sales in the company’s legacy categories, is how collectibles climbed to the top of GameStop’s revenue mix even as overall sales contracted.

Physical game sales have been under pressure industry-wide as digital downloads and cloud gaming reduce demand for boxed software and discs. GameStop’s hardware sales face similar headwinds as console cycles mature and consumers buy directly from platform holders. Collectibles have absorbed the slack and then some, driving the quarter’s operating income record.

How a video game retailer became a collectibles company

GameStop’s shift didn’t happen overnight, but the scale of it is now unmistakable. The company once defined by shelves of used games and pre-order kiosks has restructured itself around merchandise categories that have little to do with playing games at all. The Q2 results make that restructuring official in financial terms: collectibles is no longer a side business, it’s the business.

The pivot from Dumb Money-era meme stock to diversified retailer

GameStop is not the company portrayed in “Dumb Money,” the film dramatizing the 2021 meme-stock frenzy that turned the retailer into a symbol of retail-trader rebellion against Wall Street, according to a report highlighted by GameSpot. Since that period, GameStop has diversified well beyond its original identity, building out collectibles, exploring investments like its eBay stake, and restructuring its balance sheet. The Q2 numbers are the clearest evidence yet that this strategy has changed what kind of company GameStop actually is.

Wall Street’s split verdict: GME shares versus the eBay stake

GameStop’s month leading up to the earnings release included reports it might pull back a bid involving eBay, followed by the Q2 revenue beat, according to Benzinga’s rundown of the company’s recent trading activity. That kept GameStop in the headlines even before the collectibles data emerged. Analysts covering the stock are now drawing a distinction between GameStop’s core equity and its eBay holding.

Why analysts favor the eBay stake over GME shares

Analysts view eBay as GameStop’s more profitable and more straightforward holding compared to GME shares themselves, according to a report from Benzinga on GameStop’s comeback prospects. eBay runs a mature, cash-generating marketplace business with a clearer path to earnings, while GameStop’s own turnaround still depends on unproven categories like collectibles sustaining their growth rate, plus a retail footprint still working through the decline of physical game sales. That split verdict means investors bullish on GameStop’s balance sheet and investment strategy aren’t necessarily bullish on GME stock itself.

Insider buying activity coincides with the earnings beat

GameStop insiders bought shares around the same time the Q2 results came out, a pattern that often draws investor attention. There are many reasons an insider might sell a stock, but usually only one reason to buy: they expect to make money, according to a report from TipRanks summarizing recent insider transactions.

Director purchases from James Grube and Lawrence Cheng

GameStop director James Grube purchased $196,075 worth of stock, according to Investing.com. Director Lawrence Cheng made a larger purchase, buying $1.03 million of GME shares, according to TipRanks. The stock climbed 4.9% following the insider buying activity, according to a separate report from MarketBeat. Traders also bought an unusual volume of GameStop call options, with 245,499 contracts purchased in a single session, a 58% increase over the stock’s average call volume of 155,655 contracts, according to MarketBeat.

The insider purchases landed in the same window as the earnings beat and record operating income, which gives investors a data point for reading management’s confidence in the numbers. Insider buying doesn’t guarantee future stock performance, but combined with the options activity, it suggests people close to the company and active traders alike were positioning for continued momentum after the Q2 release.

What record income without games revenue means for GameStop’s future

GameStop’s Q2 results leave the company facing a real question about direction. Revenue is shrinking, but profitability is improving, and the categories driving that profitability have nothing to do with the games that built the GameStop brand. Collectibles’ 57% growth rate would need to continue, or another category would need to pick up the slack, for the company to keep posting operating income records while its core software and hardware businesses continue declining.

Analysts already view the eBay stake as cleaner and more profitable than GameStop’s own shares, according to Benzinga, which raises the question of whether GameStop’s future value lies more in its investment portfolio than in its retail operations. For now, the company’s own numbers answer the immediate question plainly: GameStop’s largest revenue category is collectibles, not games, and that is already changing how Wall Street values the stock.