'Lower Than Expected' New Game Sales Hit GameStop

Major game retailer GameStop has posted its financial results for the third quarter of the current fiscal year, noting that sales of new software were lower than expected, but that digital sales showed continued strength. The company reported that same store sales (sales of stores open more than a year) dropped 0.6 percent year-over-year, as business was "primarily impacted by lower than expected sales of new software." However, the company saw its digital sales increase by 59 percent year-over-year, with console digital sales growing 63 percent and PC digital sales growing by 51 percent. In a move to adopt more digitally-derived revenue in addition to physical game sales, GameStop purchased digital download service Impulse earlier this year, and streaming game technology firm Spawn Labs. The retailer also owns online game site Kongregate. Sales of pre-owned products at the retailer continued to grow, growing to $544.5 million, up 3.1 percent compared to the same quarter last year. The company revealed that its top five-selling games during the quarter were Gears of War 3, Battlefield 3, Madden NFL 12, Batman: Arkham City and Dead Island. Paul Raines, chief executive officer at GameStop, explained, "In the third quarter, GameStop outperformed the market and continued to execute against the long-term strategic plan through additional investments in digital and emerging businesses." "We expect that our innovative digital, iDevice and gaming tablet businesses will supplement our leading retail business this holiday." For the quarter ended October 29, 2011, GameStop posts revenues of $1.95 billion, up 2.5 percent year-over-year, and profits of $53.9 million, down 1.5 percent compared to last year's third quarter. Looking to the fourth quarter, Raines noted that the company expects a "strong sell-through of November new title releases."