GameStop continues to decline, despite boosted digital results
Although digital and mobile are helping to drive sales for video game retailer GameStop, the company still recorded a drop in revenue for the last fiscal quarter.
Sales of new software, pre-owned software and new hardware all declined during the quarter, with comparable store sales down 8.3 percent year-over-year. GameStop put this down to "the longevity of the current console cycle and the difficult comparison of major new software titles released during the third quarter of 2012."
However, 'Other' sales which includes GameStop's digital and mobile product business was up 31.1 percent year-over-year. Breaking this down, digital sales were up 31.8 percent to $127 million, while mobile sales, made up of tablet and pre-owned mobile products, were $43.2 million, in line with the company's forecast of $150 to $200 million for the full fiscal year.
This follows the company's ongoing transformation
to a company with a significant digital segment. Indeed, its digital and mobile businesses were the only sectors to grow year-over-year, with its new and used retail video game businesses declining.
In fact, the company's 'Other' businesses now make up 18.2 percent of the entire company's revenue, compared to 12.6 percent year-over-year.
GameStop CEO Paul Raines noted that the current quarter should prove more successful for retail, thanks to the the holiday season and the upcoming launch of the Nintendo Wii U.
For the quarter ended October 27, 2012, GameStop reported revenues of $1.77 billion, down compared to $1.95 billion year-over-year.
Due to impairment charges of $678.8 million, the company's losses were $624.3 million for the quarter, compared to profits of $53.9 million year-over-year.
However, the filing notes that the charges were "due to a temporary decline in the company's stock price during the second quarter," and should not affect the company's future earnings reports.