GameStop Corp. shares were under pressure Thursday after a report that streaming giant Netflix plans to enter the video game industry.
A streaming video game service from Netflix will serve as a competition for GameStop, which sells video games and related items in its more than 4,000 stores and reviews its e-commerce features in 10 countries.
Shares in Grapevine, Texas-based GameStop, fell as much as 5.7% before parrying their losses.
On Wednesday, Netflix hired Mike Verdu, a former head of Electronic Arts and Facebook, as vice president of game development.
The company plans to start streaming video games over the next year, Bloomberg News reported, citing a person familiar with the situation.
Over much of the past year, GameStop has begun to transform its business into a major e-commerce player selling a wide range of fast-moving items.
GET FOX BUSINESS ON SPEED by clicking HERE
The effort, led by Ryan Cohen, co-founder of online pet product provider Chewy, has resulted in a number of changes, including a cleanup of top management.
The change in strategy triggered a short press in GameStop shares.
GameStop shares rose 790% this year to Wednesday, but closed at a two-month low. The S&P 500 was 16% higher.