GameStop's sales rise on the back of Nintendo's Switch, even as profits slip
Today the folks at GameStop reported earnings for the first quarter of the company's 2017 fiscal year, and while game software sales (both new and pre-owned) were down, hardware sales were up in a big way -- thanks largely to Nintendo's new Switch console.
Numbers-wise, GameStop reported (GAAP) profits of $59 million on $2.05 billion in global sales for the quarter, which ended April 29th. That's a roughly 11 percent drop in profits from the $65.8 million the company brought in during the same period last year, while sales actually went up 3.8 percent increase year-over-year.
The two big sales drivers for GameStop this quarter were game hardware (specifically, Nintendo's Switch) and collectibles (think: Pokemon toys). The company also reported sales of digital goods rose 3 percent year-over-year, thanks primarily to its online game hub Kongregate.
However, the company reported an 8.2 percent decline in sales of new games, due to what it calls "the tough overlap of a few key AAA titles launched last year." Sales of pre-owned games also fell year-over-year, by 6.2 percent.
While no mention was made in the earnings release of how much headway GameStop has made in its plan to close ~150 GameStop game stores this year, it did note that it opened 9 new collectibles storefronts during the quarter, bringing the total to 95 worldwide.