GameStop’s holiday wasn’t as good as last year, but it’s good enough for Wall Street.
The world’s largest game-specific retailer generated revenue of $2.94 billion over the nine-week holiday period that ended Jan. 3. That was a 6.7 percent decline from the same period last year. But even though the total sales were down, investors are happy with GameStop’s report. The company’s stock price, which ended the trading day down nearly 3 percent to $32.77, is up more than 6.5 percent in after-hours trading.
[aditude-amp id="flyingcarpet" targeting='{"env":"staging","page_type":"article","post_id":1641773,"post_type":"story","post_chan":"none","tags":null,"ai":false,"category":"none","all_categories":"games,","session":"A"}']The decline isn’t because of any weakness in the market — ecstatic gamers flooded every retailer they could find in late 2013 to buy the freshly launched PlayStation 4 and Xbox One consoles. With the thirst for new hardware quenched by months of availability, it was up to the software to start carrying more of the spending burden — and it couldn’t make up the difference.
“During the holiday period, consumer demand for video games was strong, resulting in new software sales growth,” GameStop chief executive officer Paul Raines said in a statement. “We expect that trend to continue into the first quarter.”
Getting into the specifics, GameStop reported that new software sales grew 5.8 percent. The retailer credited PS4 and Xbox One for the biggest contribution to that growth with a 94.4 increase in game sales for those systems. Call of Duty: Advanced Warfare, Grand Theft Auto V, and Far Cry 4 were some of the biggest releases doing well on Sony’s and Microsoft’s latest hardware.
But speaking of hardware, sales of new systems dropped 32 percent. Big reasons for the decline include the launches for both consoles happening during the nine-week holiday period last year as well as a reduced price for the Xbox One and PS4 this year. Investors and GameStop both knew those issues would hurt the comparison to last year, which is why the decline isn’t hurt the retailer’s stock price.