Xbox One, PS4 launch helps GameStop haul $3.68 billion during holiday quarter
GameStop market share also reaches an all-time high; full-year sales hit $9.04 billion; company shutters R&D team Spawn Labs
GameStop reported earnings today for its fiscal fourth quarter ended February 1 and the results were largely positive. The Xbox One and PlayStation 4 launches in November helped GameStop quarterly revenue reach $3.68 billion, up 3.4 percent year-over-year, the company said. Of the $3.68 billion total, $3.15 billion came during the 9-week holiday period alone.
Comparable store sales rose 7.8 percent compared to last year. According to GameStop CEO Paul Raines, the Xbox One and PS4 launches helped reinvigorate the video game industry and even led to GameStop's market share reaching an all-time high.
"The launch of new consoles in 2013 marked the return of innovation to the video game category and GameStop's market share increased to an all-time high," Raines said in a statement. "Our emerging digital and mobile businesses, which did not exist three years ago, surpassed $1 billion of revenue."
Fourth quarter net earnings were $220.5 million, down from $261.1 million last year. Net earnings for the quarter included asset impairment charges of $28.7 million, primarily due to the closure of Spawn Labs, GameStop said.
The retailer acquired the company in 2011 and they were working on a new consumer interface that was going to offer "immediate access to a wide selection of high-definition video games on demand on any Internet-enabled device."
"While cloud-based delivery of video games is innovative and potentially revolutionary, the gaming consumer has not yet demonstrated that it is ready to adopt this type of service to the level that a sustainable business can be created around it," GameStop said in a statement.
"Also, we recognize that our strength is in helping our vendor partners connect with gamers, so we will focus our energy on selling existing services, such as PlayStation Now, through our retail channels."
GameStop also disclosed full-year sales numbers today, revealing total global sales were $9.04 billion, up 1.7 percent compared to $8.89 billion last year. Comparable store sales rose 3.8 percent year-over-year, primarily driven by a 29.7 percent increase in new video game hardware sales related to the launches of Xbox One and PS4.
New video game software and pre-owned sales fell 2.8 percent and 4.1 percent, respectively. Until the fourth quarter (when the Xbox One and PS4 were released), these two categories were negatively impacted by limited new game releases and a decrease in overall store traffic, GameStop said.
On the digital side, GameStop sales rose 15.1 percent to $724.4 million. The company's consumer electronics business increased 51.6 percent year-over-year. Finally, GameStop net earnings were $354.2 million, compared to a net loss of $269.7 million last year.
GameStop will hold an earnings call to discuss these results and answer analyst and media questions today starting at 8 a.m. PDT/11 a.m. EDT. Check back later for more from the call.