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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Avatar image for kaminobenimizu
KamiNoBeniMizu

Call of Duty Infitinite Warfare, Battlefield 1, and Titanfall 2. Of course TitanFall fails. It's a new IP that was considered okay, but not all that popular. For some reason CoD is ridiculously popular. But all I hear about it is that people love the maps. Not once have I heard people love the story of Call of Duty once it left the WWII era. Which means Activision could sell map packs year after year for $30 instead of a new game for $60.

Gameplay didn't change that much either from what I've heard. Only with BO3 & Ghost have they changed the gameplay a little with wall running & the dog.

Avatar image for spartanx169x
spartanx169x

@kaminobenimizu: COD:AW had a great campaign, well worth multiple play thrus. Ghosts campaign was decent , but not worthy of replaying. BO3 was terrible.

Avatar image for kaminobenimizu
KamiNoBeniMizu

@spartanx169x: Ah, at least there was a decent campaign post WWII. Because from what I hear about CoD from both those who loves the series, and those who hate it, it seems really repetitive and they only play (or played) for the maps in multiplayer.

Thanks for the info.

Avatar image for spartanx169x
spartanx169x

@kaminobenimizu: what I have learned about COD campaigns is , if you don't see any promotions of the story before the game launches the story is terrible. I will bet money the story will be terrible with IW because they have shown almost nothing about the story other than its in the future. While by comparison They showed that in AW Kevin Spacy was playing a major role and showed some good scenes so you had a good idea of the story. Knowing that alone should tell you its good. Spacy rarely does some thats bad. but yeah people buy it for the MP. Its easy to pick up and play with no practice with a very small learning curve unlike other MP games. So for that reason it will have a fanbase for a long time.

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gamingdevil800

Maybe partially due to them all being sequels there is nothing new.

Avatar image for camou504
Camou504

I used to be big on gamestop as a youth but now its all amazon unless im impulsive

Avatar image for clay544888
clay544888

Haha this greedy ass store deserves to fall hard...hate their lack of good prices for trading in games..I hate gamestop..

Avatar image for girlusocrazy
GirlUSoCrazy

It might help if the trade in value was more worth it than selling on ebay or amazon and if they didn't jack up new game prices too. Oh and $5 off if I buy the game used vs new. F*** off. Only go to GameStop if you want to get ripped off basically.

Avatar image for zmanbarzel
ZmanBarzel

@girlusocrazy: No, its trade-in values make sense when you think about the scale of the operation. While you can sell a single used copy of Game X on eBay for $40, GameStop has to think about turning a profit over the long run. It has to sell hundreds/thousands of copies of Game X that will be traded in not just the week or two after launch but also after those weeks turn into months and some times years, with a sticker price less than $10.

Avatar image for girlusocrazy
GirlUSoCrazy

@zmanbarzel: They need to strike a better balance I guess

Avatar image for iamrafy
iAmRafy

i.e. Call of Duty and Titanfall 2, which Titanfall being the far more superior game.

Avatar image for moose-fitz
Moose-Fitz

@iamrafy: October games dude. Call of duty came out in November and is selling extremely well again.

Avatar image for lionheartssj1
lionheartssj1

If they would price match Amazon, I would buy more stuff there.

Avatar image for juiceair
juiceair

"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 this appears to be an issue specific to GameStop."

Gamers are tired of the bullshit with Game$top and go elsewhere for games and content. Can't blame them.

Avatar image for xcrimsonxsynx
XCrimsonxSynX

@juiceair: Games are selling better digitally as well. Since the industry doesn't track those sales its hard to pinpoint exactly whats doing the damage.

Avatar image for uncha1n3d
uncha1n3d

@juiceair: I happen to be one of those people. Unless a physical copy of a game is ONLY available at Gamestop, or once in a blue moon I have a couple of trade-ins, I avoid Gamestop whenever I can. They ask you too many questions and I hate how Gamestop corporate treats their employees and customers in general

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No_one

@uncha1n3d: Yeah screw EB Games.

Avatar image for Thanatos2k
Thanatos2k

@no_one: No, EB Games was good. Then they replaced them all with Gamestops and they went to shit.

Avatar image for snugglebear
snugglebear

Also I've been embezzling millions.