Best Buy sees "double digit declines" for games
US retail chain reports $8.4 billion revenue for December
Electronics retailer Best Buy has reported a comparable stores sales decline of 1.2 percent for the December financial period, and admitted to a decline in gaming sales.
The revenue summary for December saw $8.4 billion in revenue, with $1.9 billion coming from international sales.
While the company didn't release specifics regarding revenue for its game division, the official statement did reveal a significant decline.
"Gaming and digital imaging both experienced low double-digit declines in comparable store sales."
In the domestic market consumer electronics were responsible for 40 per cent of the revenue, with computing and mobile at 35 per cent, and entertainment at 16 per cent. Online the domestic channel saw a 26 per cent increase in revenue compared to the previous year.
In the international market computing an mobile phones took the lead with 48 per cent, followed by consumer electronics at 29 per cent and entertainment at just 9 per cent.
"We built off of share gains in the third quarter to deliver December sales that we believe compared favourably to the retail CE industry," said CEO Brian J Dunn.
"Based on our performance in December we continue to expect to achieve our annual guidance, despite customer traffic that was lower than expected until the last week before Christmas, which resulted in December revenue that was slightly lower than our expectations."
Analysts Cowen & Company responded to the figures, calling concerns over the decline "overblown."
It cites competition from Amazon and dedicated gaming retailers like GameStop as factors in Best Buy's declining share, and a tendency from some retailers to rely on Wii and handheld gaming.
"Historically holiday periods have overindexed towards the Wii and handheld platforms because there is a lot of gift giving to kids," explained the report.
"We believe these games are often bought by parents at the big box retailers (we believe the big box retailers overindex towards the Wii/handheld markets relative to, say, GameStop). However, the Wii and handheld segments of the gaming market are in serious decline, we believe due to competition from mobile and social gaming."
They also note that the Xbox and PlayStation market remains strong.
In the UK, the Morrison's supermarket chain is currently in talks to acquire former Best Buy retail sites, according to the Financial Times. The 11 UK stores were closed in November after annual losses of £62 million.