GameStop Sales Hurting, as New Call of Duty Underperforms; Pokemon Sun/Moon Biggest of 2016

The retailer saw its revenue and profit decrease year-over-year.

117 Comments

[UPDATE] Here are some of the takeaways from GameStop's earnings call, based on comments made by management:

  • Pokemon Sun and Moon are the best-performing games for GameStop all year; preorders for the game were the highest for any game at GameStop in five years.
  • Call of Duty: Infinite Warfare underperformed, though specifics were not shared
  • PS4 Pro is off to a "strong" start, while PSVR units are selling well, as they only stay on shelves for an average of 10 days.
  • 27 percent of GameStop's PowerUp Rewards members who are aware of the Nintendo Switch plan to buy the console. This pre-launch purchase intent metric is in line with that of the Xbox One at a similar point in time. The figure could go higher after Nintendo's Switch news event in January.

The original story is below.

GameStop today reported earnings for the quarter ended October 29, and the results were not what the retailer would have wanted. The store reported total global sales of $1.96 billion, a decrease of 2.8 percent year-over-year. As GameStop said in its preliminary sales announcement, games released in the "last few weeks of October" underperformed, with new software sales dropping by 8.6 percent.

No specific titles were mentioned, but Gears of War 4, Battlefield 1 (October 21), Civilization VI (October 21), Titanfall 2 (October 28), Skyrim Special Edition (October 28), would be considered high-profile games that came out at the end of October. For Titanfall 2, EA management recently suggested that first-day and first-week sales were not extraordinary. One analyst said Titanfall 2's sales would be "substantially disappointing" in part because the game's release was sandwiched between Battlefield 1 and Call of Duty: Infinite Warfare (November 4).

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Pre-owned game sales slid 6.4 percent. On the hardware side, this was a tough quarter for GameStop, as new hardware sales dropped by 20.6 percent. Hardware sales dropped across the industry in October, so this doesn't appear to be a problem that's specific to GameStop.

On the brighter side for GameStop was its digital business, which saw revenue rise 13.2 percent to $258.9 million. Growth in this area was driven by DLC, digital currency, and mobile game sales. GameStop's mobile sales specifically benefited from the launch of Animation Throwdown: The Quest for Cards, a smartphone game that brings together characters from Fox shows like Family Guy, King of the Hill, and American Dad.

Elsewhere, GameStop's Technology Brands division saw its sales rise 54.4 percent to $216.3 million, while the company's Collectibles unit posted $109.4 million in revenue, up 37.3 percent. Sales in this category were led by Pokemon and Five Nights at Freddy's toys.

Overall, GameStop posted a profit of $50.8 million for the quarter, down from $55.9 million.

Looking ahead to the all-important holiday quarter, Gamestop said it expects store sales to be down, ranging from -12 percent to -7 percent.

Last year, GameStop reported that Halo 5: Guardians, Star Wars Battlefront, and Assassin's Creed Syndicate all performed below the company's expectations. For what it's worth, games sales across the industry improved in October, so it looks like GameStop is uniquely affected.

GameStop will hold an earnings call to discuss these results and more starting at 2 PM PT / 5 PM ET. We'll update this post or write a new story if anything noteworthy comes up during the talk.

Got a news tip or want to contact us directly? Email news@gamespot.com

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Bahamagamer

I don't get why everyone keeps saying COD underperformed. I think it was the fastest selling game of last year. With over 15 million copies sold by January I believe.

God bless everyone.

Avatar image for Bahamagamer
Bahamagamer

My thoughts on this.

God bless everyone.

https://www.youtube.com/watch?v=eBY8_BXBHCg&feature=youtu.be

Avatar image for clqtte
clqtte

Pokemon is a king of all games

Online
Avatar image for mundus
mundus

Oh boohoo if you charge $10 more than games costs in other places what do yoi except? Why buy from gamestop when there are 100 other retailers that are cheaper??

Avatar image for bellz666
bellz666

I'm certain the advent of the Amazon prime new-game discount has to hurt. Getting a game on release day, at 20% off, is a no--brainer. I don't buy anything at Gamestop unless its heavily discounted or I need it immediately.

Avatar image for techdemon
TechDemon

Everybody I know who even owns Infinite Warfare only owns it because they had to buy the Legacy edition to get Cod 4 remastered. People aren't touching IW. I for one can't stand the jetpacking, wallrunning, and sliding.

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Externalpower43

Finally getting tired of Call of Duty? Lol.

Avatar image for coladar1
Coladar1

It really isn't hard to figure this one out - stop releasing so many damn games at once, whilst the rest of the calendar is nigh empty. I mean what the hell, there are so many AAA, *huge* titles over the past month as to be unable to properly count them all. Then, from January to September, you had to actively search for something -anything- decent to play.

And this year, add to that the PSVR coming in mid-October...?!? Wallets and budgets aren't made to handle such an avalanche of content coming all at once. Games and gamers aren't little kids anymore, an audience that require XMas gifts to afford to play - scheduling releases around this one singular month is sheer insanity, and, based on all the headlines this week (for several different titles, CoD just one of many what with Titanfall, Watch Dogs, etc.), doing very real and very tangible harm to the games industry at this point.

I mean crap, Battlefield and CoD both released almost within days of each other. There are 365 damn days in the year, so of course it makes sense to put them within inches of each other. There's $120 that most gamers blew right then and there - oh, and who can forget DLC, Super Duper Deluxe Editions and Season Passes (surely not the publishers), that now turns $120 more like $200, for only two games, in a timeframe of but a couple of weeks.

Who has the money for that, reaching $200, before even thinking of getting Watch Dogs 2, Dishonored 2, Killing Floor 2, Titanfall 2, (what the **** is with all the Twos this month?!) Mafia 3, Dragon Quest Builders, World of Final Fantasy, and the biggie next week, Final Fantasy XV. Plus $400 for PSVR. Plus another $400 for PSPro. Plus smaller releases, *any* VR games, etc.

Money, hell, who has the time?!? Games, regularly taking days to weeks to play through on normal schedules. There's not enough time if you wanted to play them each, let alone being bored and looking for some new title to purchase.

Oh, and did I mention yet how utterly dead the first nine months of the year was? Like totally, completely devoid of solid new games; sure, we got a crap ton of remastered rehashes (Bioshock, Arkham, Resident Evils, etc.), but of the AAA variety that we are now hearing has fairly dramatically failed to live up to sales expectations? Nada.

Whosoever in the industry that works in this particular area should all be summarily fired and executed, post haste. Even the film industry has enough common sense to stagger their major blockbusters, rather than directly competing against each other all on the exact same weekend (figuring games, owing to their needing so long to play, require some 2-3 weeks worth of such "windows," comparatively speaking.) For example, whichever idiot company was the later to schedule in the Battlefield vs. CoD: 2016 arena should also be mightily mocked and ridiculed prior to their decidedly public execution.

And then, after this next week, we go back to another 10ish months of absolutely zilch in the AAA video game lineup. At least there's RE7 to look forward to for January.

As for myself...? I'd easily have purchased (and played) Watch Dogs, CoD, Dishonored, Mafia 3, Dragon Quest + World of FF if we lived in a rational world where such titles were staggered, perhaps released 1-2 major, huge AAA's per month. As it stands, however, I have not purchased any of those... and won't do so now, until they go on sale/discount, since the newness/shine and their appeal as an impulse buy are long gone... got too much else to play, and waited this long, I can wait a bit longer to save myself over a hundred bucks. The PSVR, Battlefield, Until Dawn: RoB, Arkham VR, Here They Lie, FF15, Amnesia Collection, were all more than enough to sate my entertainment needs for one month alone (and, thanks to VR, far, *FAR* too much for my wallet.)

Avatar image for joseph_purdy
Joseph_Purdy

@coladar1: From Software has released Dark Souls 2, Bloodborn and Dark Souls 3. Each of these titles were released in late March or early April.

Avatar image for YukoAsho
YukoAsho

@coladar1: Indeed. Gamers are getting older, and they have to get choosier.

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BigDaddysHouse

@coladar1: But No-one said you have to buy them all.

Avatar image for hazydave00
Hazydave00

They don't even try to compete with Prime or GCU.

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BigGamerDude

Pokemon has the most pre orders for any game released the past 5 years?!

What?!

Avatar image for ILSATS
ILSATS

@biggamerdude: It's pretty big, bro.

Avatar image for Milknweed
Milknweed

@biggamerdude: Pokemon is pretty popular dude, especially with the Pokemon Go trend that began a few months back.

Avatar image for biggamerdude
BigGamerDude

@Milknweed: I know, but, seriously...

Considering the last 5 years include GTA5, BO3, and Fallout 4, I'm surprised it surpassed all of those.

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Paulf001

Get all my games at best buy with 20% off with GCU. Since GS doesn't offer a 20% off program they aren't getting my business.

Avatar image for deactivated-5b0457a4d6084

SONY is switching to a 3 year hardware refresh cycle, this way technology isn't held back and evolution will continue. PS5 will be introduced in 2018 and released in 2019. Microsoft is doing the same thing but they'll switch to a 4 Year refresh cycle.

Avatar image for dlaney34
DLaney34

If Gamestop doesn't counter it's methods, it's simply going to be the blockbuster video of retail game sales. Bankrupt.

However, with the inception of Steam, Uplay, and Origin, and GOG, I feel they're too late. In 10 years, boxed game sales will be considered redundant and outdated. It already is. Ironic that it's digital sales division (which is tiny) is the only bright spot in their earnings report.

As a PC gamer, I can say in the past 4 years I've purchased about 45-55 games, and Not stepped into a GameStop once.

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santinegrete

@dlaney34: I miss PC retail with not a single piece of DRM, made pretty nice collectibles those times :)

Avatar image for dlaney34
DLaney34

@santinegrete: I'm not into collecting boxes. A digital library is far more logical. However, I'm a hypocrite in that I'm a bibliophile ; and have about 1 thousand books, stored in over 17 bookcases, throughout my home. But books in my opinion are far more timeless then software.

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dylan35

Haven't been to gamestop in almost 3 years!

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bobbo888

Makes perfect sense. For example If you have a playstation credit card with Capital One you get points 10x points for making purchases on playstation network which eventually leads to free stuff/games. Why leave your house to go to gamestop when you can pretty much get the game instantly with benefits?

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CyrusDrake20

No surprise here. Gamestop Pro Rewards are a joke and cannot even come close to competing with Amazon Prime Pre-orders for 20% off.

Avatar image for Samus12345
Samus12345

@CyrusDrake20: True dat, I'll never be buying another full price game from GameStop unless they can match that $50ish price point. It still applies for 2 weeks after a game is out, too!

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dogpigfish

They need to sell digital games in store. This is cd's all over again. They only track people who want to play and trade in, the blockbuster video sort. I think GameStop is doing a good job changing, but more has to happen if they don't want to end in bankruptcy.

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Batts86

@dogpigfish: this... Why can't I swing into a GameStop and just purchase a digital code? It's beyond stupid. Also for the love of god they need to stop trying to upsell me!

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MarcRecon

Seriously, who didn't see that coming!

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aquarake

I buy new games now pretty much exclusively at Amazon due to the 20% prime discount on new games. As someone who usually gets the collector's edition if there is one, that discount is huge. Even just for normal $60 games, that money saved really adds up over time. Best buy is also 20% off new games with their gamer club program. GameStop step up if they don't want to continue to lose sales to those retailers.

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VS_Shield

Titanfall has been such a pleasant surprise. I am enjoying it more than BF1, which I did NOT expect. I am not interested in COD.

Avatar image for GRADERBLADE13
GRADERBLADE13

I really hope more people get titanfall. I love bf1 but I usually have more fun while playing titanfall. **** EA for releasing it at such a shitty time.

Avatar image for yukushi
yukushi

Sometimes I think activsion thinks that gamers are zombies did they really think that people would keep buying the same call of duty year after year didnt they think people would burn out and get tired of it and want to play something else, grand theft auto 5 has sold over 70 million and counting because they dont pimp out their games and release the same crap every year.

Avatar image for zmanbarzel
ZmanBarzel

"...while the company's Collectibles unit posted $109.4 million in revenue, up 37.3 percent."

Is ThinkGeek included in this unit, or is it split out?

Avatar image for deactivated-58bd60b980002

I dunno but here in Canada Eb Game gave up on video games apparently ... I went there last weekend and easily 90% of the surface of the store is about collectable, board games, stuffed caracters all about video games ... but actual video games only represent 10% of store and in a dark corner.

It's over for retail apparently, if they do that it is because they don't sell as much games as they used to be.

Avatar image for Daelusca
Daelusca

Physical sales were down less than 3%? I call that an amazing win for them in delaying the inevitable here. People don't question why movie rental stores are gone or why book stores are far fewer and struggling....why would game stores be different? Been a few years since I have bought a physical game....and I buy a lot of games.

Avatar image for latreides
latreides

@Daelusca: when Tor books goes out of bussiness, or stops selling an eBook, your eBooks will continue to work on your devices forever. When Sony stops supporting the PS3 or Microsoft the 360, or one of them stops the game business entirely, your digital collection will shortly be garbage. Even if you backed up everything. Its much easier to backup and protect from bit rot, hundreds or thousands of 5 MB MP3s/epubs than it is hundreds or thousands of 20-60 GB games.

In fact Sony already discontinued their Playstation Mobile game support and its no longer possible to download them anymore, thankfully they were pretty small.

Avatar image for Samus12345
Samus12345

@Daelusca: I like physical copies because they're usually cheaper after the game's been out a while and I can trade them in. It might not be for a huge amount, but anything is better than the nothing you'll get from digital. That said, when digital games are cheaper than physical I'm all for them!

Avatar image for Darth_Tyrranus
Darth_Tyrranus

@Daelusca: I totally agree. I was skeptical of digital games for a while, but once I tried out Steam, I never went back to physical games again. I too was surprised that Gamestop was able to do so well this year, but I expect their performance will continue to slide in the future, eventually leading to their demise.

Avatar image for maskthestars
maskthestars

@Daelusca: I only like physical because I can sell it if I'm just done with that one. Its about 50/50 between games I buy that I'll never sell and ones that once I beat it, it has little replay value.

Avatar image for nutcrackr
nutcrackr

Hardware sales drown 20% and yet the PSVR launched?

Avatar image for YukoAsho
YukoAsho

@hellcat29er made a great point about Amazon. The Gamestop haters are likely overstating digital distribution's impact, but mail-order online retail like Amazon and ebay are probably the bigger issue. And it's not just games. I got a 15-foot HDMI cable for $6 off an eBay seller. I can hop around Amazon and find good deals, and I don't even have Prime.

GameStop's not the only one having this issue. Between the mega-box retailers like Wal-Mart and Target and the increasing encroachment from mail-order outlets like Amazon, Newegg and the like, retail in general is drying out. With retail and manufacturing both being near-completely automated online affairs in the future, I find myself worrying where the world will end up. The increasing scarcity of human jobs, and the income that comes with them, are going to affect a hell of a lot more than GameStop's margins, and soon.

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crxuchilbara

@YukoAsho: that's why I don't trust any if this analysis. GameStop is not the best example of gaming deals or know how. And why GAMESPOT relies on them so much is almost becoming irrelevant. Like you said, Walmart just got sold to China cause Warren buffet don't know crap about online. People need to be smarter and start looking around.

And also, calling someone a gamestop hater is like saying white milk.

Avatar image for hellcat29er
hellcat29er

I agree with the article about Titanfall...it's not a bad game, just comes around at the wrong time. It's hard to compete with COD (I don't know how these days) and Battlefield. I don't feel too bad for Gamestop...I buy my games on Amazon now with Prime...I save on the overall cost of the game, get it shipped to my door on release day. No waiting in long lines for people to trade used crap in to get the latest game, or to stand impatiently and listen to the only 1 or 2 clerks try and sell game disc protection, Power Up Rewards, Expansion packs etc., for every single transaction. The fact that they've seen an uptick in their digital sales tells you where they'll go next if brick and mortar fails them, but even that's hard to compete when you've got STEAM out there that is pretty much the digital gaming nexus. Still though, I do buy some things at Gamestop on occasion like controllers or xbox creds. I just don't go there for my game needs because of Amazon...it's a genius plan they came up with to save customers money and undercut the brick and mortar, even online competitors. Sure, might not have the game at midnight, but I'm an old man at 38, I don't have the patience to stand outside in a line anymore waiting for the latest and greatest game.

Avatar image for grizt00f
GriZt00f

I would like to see Physical game media being bought but not at Gamestop. Back in the day we had quiet a few game stores around to get games at, such as KB Toys, EB Games, Funcoland and a local shop called Gaming Experience which was my favorite. Gamestop fucked it all up and i hope they crash and burn so some new stores can rise out of their ashes. But if everyone goes digital we will loose game stores all together. You can't stop the future but i would always love to have a video game store to walk into and buy games from.

Avatar image for YukoAsho
YukoAsho

@grizt00f: There are still other places. The big box stores and ESPECIALLY online retailers like Amazon are a huge part of the equation.

Like you, I'd love another specialty retailer, but the environment is too risky. But hey, Toys R Us ain't bad...

Avatar image for YukoAsho
YukoAsho

@7tizz: I think you're under-simplifying. While Gamestop's probably seeing money in game time cards and the like, the problem with their physical sales is hardly limited to them. Retail in general is suffering.

Avatar image for Flyin3lvl
Flyin3lvl

@7tizz: yep like your trending the anti sony narrative just keep going its fun to see someone flip over a console like you do :D