Despite a plethora of positive hype leading up to the holiday
shopping season, GameStop (NYSE:
) has announced that its comparable store sales decreased 4.4
percent worldwide. In America, GameStop endured a comparable store
sales decrease of 3.5 percent. The losses were even greater
overseas, with international sales plummeting 6.4 percent.
"GameStop experienced mixed results during the holiday selling
period," GameStop CEO Paul Raines said in a
. "Our successful Wii U launch, strong digital growth and continued
momentum in the mobile space were countered by a decline in store
"As a result, GameStop expects its fourth quarter 2012 earnings
per share results to be at the low end of its current guidance
range. Our strong market share positions us well for the future,
and we look forward to new product launches in 2013."
In other words, GameStop is at the mercy of game publishers and
During the holiday period, GameStop said that new hardware sales
decreased 2.7 percent despite the release of Nintendo's (OTC:
) Wii U. The retailer sold 320,000 of the
more than two million
Wii U consoles that have been sold worldwide.
GameStop also announced that the sale of new video games
decreased 5.1 percent "as frontline title releases could not offset
a decline in overall store traffic." Those "frontline title
releases" include Activision's (NASDAQ:
) Call of Duty: Black Ops II, which earned
more than $500 million
in 24 hours. Halo 4, another frontline title, earned
on its first day of release.
"The pre-owned category declined 15.6% as limited inventory due
to fewer new titles released throughout 2012 and less promotional
activity negatively impacted sales compared to last year," GameStop
That last figure should be particularly interesting to game
publishers that are
against the sale of used games
. For years they have tried to diminish the trade-in business by
employing gimmicks that only hurt consumers. Little did they know
that the simplest way to end the sale of used games is to stop
releasing new software altogether.
In addition to the aforementioned declines, GameStop also raised
its digital receipts by 40 percent. Mobile business sales came in
at $76.5 million, though GameStop did not provide any comparisons
to last year's figures. However, it did announce that global
e-commerce sales improved 20.5 percent.
Finally, the video game retailer lowered its Q4 guidance. The
company expects its comparable store sales range to come in at
-7.0% to -4.0% during the fourth quarter. For the full year,
comparable store sales are anticipated at -9.0% to -7.5%.
Investors reacted to the new by promptly bailing on the stock.
GameStop is currently down more than six percent. Despite enduring
a rocky year for the game industry, the retailer gained more than
five percent in 2012.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice.
All rights reserved.
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