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GameStop anticipates lower-than-expected earnings due to low sales of October games

Gears of War 4, Battlefield 1, and Titanfall 2 weren't enough to buoy the brick-and-mortar retailer.

David Craddock

November 2, 2016 12:34 PM

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Although GameStop won't report its latest earnings until later this month, the company issued a preliminary report indicating a decrease in sales revenue (via GameSpot).

GameStop CEO Paul Raines admitted that October releases "underperformed," contributing to a 6 or 7 percent drop in store sales for the quarter ending October 31. Earlier this year, the company anticipated a range of down 2 percent or up by 1 percent, making the final drop significantly worse than expected.

Some of October's biggest releases included Battlefield 1, Titanfall 2, Gears of War 4, Mafia 3, and WWE 2K17.

This marks something of a trend for October releases. GameStop was similarly disappointed by releases last year at this time, such as Assassin's Creed Syndicate, Halo 5: Guardians, and Star Wars Battlefront.

GameStop now projects last quarter's revenue to be around $2 billion, an adjustment based on "sales trends of recently released new video games as well as the current sell-through rate of new video game hardware."

News isn't all bad. The company increased its market share overall thanks to growth in its Technology and Collectibles divisions, and the forthcoming releases of PlayStation 4 Pro, Xbox Scorpio—the hardware upgrade for Xbox One—and Nintendo's Switch, a console/handheld hybrid to be released in March, comprise a light at the end of GameStop's sales tunnel.

"We remain excited about the innovation coming into the video game category over the next twelve months, including virtual reality, the Sony PlayStation 4 Pro, the Nintendo Switch, and Microsoft's Scorpio," said Raines. "We also remain confident that our diversification strategy will provide long-term growth and shareholder value."

Regarding VR, Raines has reason to be optimistic. GameStop recently reported it sold through its stock of PSVR headsets, and placed orders for more ahead of holiday traffic.

David Craddock

Long Reads Editor

David L. Craddock writes fiction, nonfiction, and grocery lists. He is the author of the Stay Awhile and Listen series, and the Gairden Chronicles series of fantasy novels for young adults. Outside of writing, he enjoys playing Mario, Zelda, and Dark Souls games, and will be happy to discuss at length the myriad reasons why Dark Souls 2 is the best in the series. Follow him online at davidlcraddock.com and @davidlcraddock.