GameStop sales down as blockbuster franchises fail to deliver at retail
Earlier this month GameStop warned that its third quarter results would be "weaker than expected" due to a number of underperforming October releases.
That prediction has now come to pass, with the retailer's latest financials showing total global sales fell by 2.8 percent to $1.96 billion.
New hardware sales were hit the hardest, tumbling by 20.6 percent year-over-year, while new software sales also saw an 8.6 percent drop off.
Pre-owned sales managed to slightly outperform new software, but still declined by 6.4 percent over the past 12 months.
GameStop clearly overestimated the selling power of October's biggest releases such as Mafia 3, Gears of War 4, Civilisation VI, Titanfall 2, and Battlefield 1 -- though that's not to say those titles didn't sell well on their own terms.
"While the video game business has underperformed recently, we are focused on maintaining our leading market position, especially during the holiday season, as well as driving diversification through the growth of technology brands, digital, and collectibles," said company CEO, Paul Raines.
It's in those areas in which GameStop has found a silver lining, with digital game sales growing by 11.8 percent -- thanks to a rising demand for DLC and in-game currencies -- to pull in revenues of $258.9 million.
Collecible sales also rose by 37.3 percent to $109.4 million, with Pokemon and Five Nights at Freddy's products being earmarked as standout performers in that category. Sales of tech brands soared as well, rising by 54.4 percent to $216.3 million.
Overall, during the third quarter GameStop posted net earnings of $50.8 million, slightly down on the $55.9 million it posted this time last year.