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GameStop Winter Holiday Sales Fell 16%

15 Jan, 2017 By: Erik Gruenwedel

GameStop said sales for the nine-week winter holiday period (ended Dec. 31, 2016) fell 16.4% to $2.5 billion, compared with $2.9 billion in the previous-year period. Same-store sales plummeted 18.7%, including 26.6% in November and 13% in December.

The nation’s largest video game retailer attributed the decline to drop-offs in hardware sales ($519 million from $745 million) of PlayStation 4 and Xbox One, in addition to underperforming sales of new game releases Call of Duty: Infinite Warfare and Titanfall 2, coupled with discounted console promotions on Thanksgiving Day and Black Friday. 

New software sales fell to $797 million from more than $1 billion. Previously used game revenue dropped to $514 million from $558 million.

CEO Paul Raines called the results disappointing.

“During the holiday period, sales … were impacted by industry weakness, promotional pricing pressure and lower in-store traffic, amid a difficult holiday season for many retailers.”

In a move to transition in-store sales away from games to collectibles and phones, among other alternative categories, GameStop saw collectibles revenue increase 27.1% to $176.9 million — due to an assortment of Pokémon products. Year-to-date sales reached guidance of $450 to $500 million. Technology brands revenue, which is not included in comparable store sales, increased 44% to $192.4 million, driven by strong sales of the iPhone 6s, iPhone 7 and Samsung Galaxy S7.

“We did see continued growth in our non-physical gaming businesses and we expect this category to approach 40% of our earnings in fiscal 2016,” Raines said.

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