GameStop Earnings Deep Dive: Hot Titles Could Not Woo Consumers
On Thursday, the retailer GameStop Corp. (NYSE:GME) reported new video game sales came in “lower than expected” thanks to consumers keeping their wallets closed even while tempted by new offerings.
New titles for the November through January include the introduction of Modern Warfare 3 (NYSE:ATV), The Elder Scrolls V: Skyrim, Assassin’s Creed Revelations, Saints Row The Third (NASDAQ:THQI) and Halo: Combat Evolved Anniversary (NASDAQ:MSFT) and on December 20, Electronic Arts’ (NASDAQ:ERTS) and BioWare’s MMORPG, Star Wars: The Old Republic will be introduced.
Third Quarter Earnings
GameStop also reported its third quarter earnings on Thursday with in-line earnings per share of $0.39 and $1.95 billion in revenue (a rise of 2.5 percent year over year). It also disclosed that same-store sales fell 0.6 percent, but this represented a rise from the second quarter’s 9.1 percent drop.
The company’s profit of $53.9 million was down 1.5 percent year over year while digital sales jumped 59 percent during the same time period.
In GameStop’s (NYSE:GME) earnings all, CEO Paul Raines said, “The quarter presented some challenges in topline, due to a cash-strapped consumer that could not afford all of the good titles released during the quarter.”
And company president Tony Bartel added, “We had expectations for strong sales due to the great title lineup and record reservations. But we found that consumers were unable to fund the products that they wanted, as these strong titles rolled out week after week.”
With the approaching holidays and new titles, Bartel expressed confidence that consumers will put together cash for new games. He said,”Recent titles are strong, and we do not see new titles falling off.”
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