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GameStop Looks to Upgrade Cycle and Baby Yoda for Recovery

By Rich Duprey - Mar 9, 2020 at 8:19AM

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The video game retailer hopes to cash in on popularity of Disney's popular character.

GameStop (GME 0.40%) isn't just waiting on the video game console upgrade cycle to revive its flagging fortunes, it's also counting on Baby Yoda to help lift sales.

The video game retailer is bringing the Force to breakfast with an exclusive waffle maker that imprints an image of The Child, known colloquially as Baby Yoda, from the wildly popular Disney (DIS 3.98%) streaming TV show The Mandalorian.

Baby Yoda waffle maker

Image source: GameStop.

Banking on Baby Yoda

The switch to online gaming and digital downloads has been particularly hard on GameStop, which has long made its money on physical media for video games. Sales are currently in a deep trough as consumers await new gaming consoles from Microsoft and Sony, which are due out later this year.

Yet GameStop also has a profitable collectibles business -- the only segment seeing revenue growth these days -- that is mostly driven by sales of Funko figures. While it was undoubtedly disappointed at how badly Disney misjudged the popularity of Baby Yoda -- as it didn't have any dolls of the character available for the Christmas holiday -- the recent Toy Fair in New York City revealed a slew of new products that will come to market beginning in May.

The GameStop-exclusive Baby Yoda waffle maker will be available in September, coinciding with the return of the second season of The Madalorian. The device is available for just under $40 and according to the preorder page. It can be used to make waffles, but "can also be used to make eggs, brownies, cakes, quesadillas or even as a Baby Yoda sandwich press."

 

Teresa Kersten, an employee of LinkedIn, a Microsoft subsidiary, is a member of The Motley Fool's board of directors. Rich Duprey has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Microsoft and Walt Disney and recommends the following options: long January 2021 $60 calls on Walt Disney, long January 2021 $85 calls on Microsoft, short April 2020 $135 calls on Walt Disney, and short January 2021 $115 calls on Microsoft. The Motley Fool has a disclosure policy.

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Stocks Mentioned

GameStop Corp. Stock Quote
GameStop Corp.
GME
$40.53 (0.40%) $0.16
The Walt Disney Company Stock Quote
The Walt Disney Company
DIS
$112.43 (3.98%) $4.30
Microsoft Corporation Stock Quote
Microsoft Corporation
MSFT
$289.16 (2.43%) $6.86
Sony Corporation Stock Quote
Sony Corporation
SONY
$85.33 (2.17%) $1.81
Funko, Inc. Stock Quote
Funko, Inc.
FNKO
$21.18 (0.67%) $0.14

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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