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GameStop forecasts bigger-than-expected holiday sales drop

World's largest games retailer predicts decline during crucial selling period

New forecasts from GameStop show a more significant decrease in same-store sales during the current quarter than previously expected.

Reuters reports the retailer expects a decline of between 5% and 10% for the three months ending December 31st, with revenues predicted at $3.17bn to $3.35bn. Analysts were previously expecting revenues of $3.45bn.

Sales at established stores were also expected fall by up to 12% in the fourth quarter - again, this is higher than analyst predictions of 7.1%.

In an interview yesterday, chief operating officer Tony Bartel said the firm is forecasting double digit decline for the entire video game category - including hadware, software and accessories - for November, with single digit decline in December. However, Bartel expects the business to be flat to positive in January.

Giving a specific example, he said sales for Call of Duty: Infinite Warfare would be lower than last year's outing for the Activision franchise. One reason given for the overall decline was the increasing number of players buying and downloading games directly through their console rather than purchasing physical copies.

It echoes similar struggles at UK retail, where acclaimed and big-budget titles such as Watch Dogs, Dishonored and Titanfall have struggled to meet their expected sales potential. GamesIndustry.biz analysed the potential causes and impact of retail decline earlier this week.

Despite the doom and gloom, GameStop's shares actually gained 2.1% to $24.61 as the company maintained its full-year profit forecast. Bartel said diversifying the retailer's portfolio will help expand operating earnings. Q3 revenue from the firm's technology business - such as mobile phones and other electronic devices - rose by 54.4 per cent when compared to the same period last year.

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James Batchelor

Editor-in-chief

James Batchelor is Editor-in-Chief at GamesIndustry.biz. He has been a B2B journalist since 2006, and an author since he knew what one was

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