At least three Wall Street analysts cut their price targets on GameStop ( GME ) stock on Monday, following the video game retailer’s fiscal fourth-quarter earnings and guidance. Late Thursday, GameStop delivered mixed Q4 results and current-year guidance. The Grapevine, Texas-based company also acknowledged for the first time that physical video game sales are in permanent decline. Pacific Crest Securities analyst Evan Wilson said it took several years for GameStop to admit what most industry observers already knew — that digital game downloads were cannibalizing physical game software sales. GameStop executives said diversification is now the company’s main strategy. GameStop is increasing its specialty stores that sell AT&T ( T ) and Apple ( AAPL ) products as well as outlets that sell pop-culture collectibles based on “Star Wars,” Marvel superheroes, “Game of Thrones” and other creative properties. Wilson reiterated his sector-weight rating on GameStop stock. “We remain skeptical on the collectibles business and AT&T reseller stores,” Wilson said in a research report Thursday. “These can all be fine businesses, even with better margins than the core. However, they just cannot be big enough to replace games and justify GameStop’s current market capitalization, in our view. We continue to expect it to spin its tires diversifying away from games and to underestimate the pace of negative change in the game business.” Benchmark analyst Mike Hickey on Monday reiterated his sell rating on GameStop stock and lowered his price target to 26.33 from 27.36. GameStop was down a fraction, near 30, in afternoon trading on the stock market today . GameStop Knocked As A ‘Waffle Maker Retailer’ Hickey knocked the company’s efforts to to grow sales through mobile devices and pop-culture collectables. “We remain largely unimpressed by the company’s transformation to a mobile distributor/T-shirt, bento box, waffle maker retailer,” Hickey said in a report. GameStop has an “outmoded” business model built around sales of game hardware and software using traditional retail stores, he said. Hickey says console software sales will turn completely digital within the next five years. For its fiscal fourth quarter ended Jan. 30, GameStop earned $2.40 a share, excluding items, on sales of $3.53 billion. Analysts polled by Thomson Reuters expected $2.25 a share on sales of $3.56 billion. On a year-over-year basis, GameStop EPS ex items rose 12%, but sales ticked up just 1%. Game hardware and software accounted for nearly 87% of sales in fiscal Q4. Sales of game products dropped 3.1% to $3.05 billion in Q4. Mobile and consumer electronics sales rose 16.9% to $209 million, accounting for 5.9% of Q4 revenue. Top sellers included the Apple iPhone 6S, the Apple Watch and Beats headphones. GameStop added 552 new technology brand stores last year and ended the period with 1,036 stores, including the Simply Mac and Spring Mobile chains. Sales of collectibles and other products rose 77% to $266 million, making up 7.6% of revenue. It ended the fiscal year with 35 collectibles stores worldwide, including ThinkGeek outlets. Piper Jaffray analyst Michael Olson maintained his overweight rating on GameStop stock, but cut his price target to 41 from 42. He noted that the company’s guidance for Q1 and fiscal 2016 was below consensus estimates. Wedbush analyst Michael Pachter reiterated his outperform rating on GameStop stock, but cut his price target to 36 from 38. He took a more cautious stance as the company increases its mobile phone retail business. “GameStop is a quality retailer, has a shareholder-friendly capital allocation strategy, and has prudently managed the transition from a games-only retailer to a multi-channel retailer of games, mobile hardware and services and collectibles,” he said in a research report Monday. “We expect GameStop’s core business to continue to contract, and expect its mobile and loot businesses to continue to grow.”