GameStop watched as its fiscal first-quarter earnings fell by 9.8% this year due to a lack of new game titles typically required to draw in new customers.
GameStop officials in its earnings call also announced that earnings will likely fall by another 10 cents to 18 cents per share throughout the second quarter as new games continue to slowly trickle onto the open market.
With sales slipping over at least the next quarter the company also predicts that store sales will be down by 5% this year, 3.5% worse off than the company’s March forecast.
Investors unhappy with the company’s slumping sales sent its shares down to 8% ($19.15) in morning trading.
According to Paul Raines, GameStop’s CEO:
“The new console and new software business has been in decline.”
Raines also announced that GameStop was attempting to curb that decline in sales by offering new options for customers, such as providing digital download codes, refurbishing Apple mobile devices and selling Google Android tablets, some of which come with games already installed for play.
That new approach appears to be working, while console and traditional hardware sales fell, digital goods, specifically downloadable codes increased by 23% when compared to Q1 2011.
GameStop should see a nice push in the opposite direction if the Nintendo Wii U console makes it to market before the end of 2012.
As Raines explains:
“With new consoles, we have an opportunity to bring billions of dollars into the market as current generation console owners trade up.”
GameStop reported a profit of $72.5 million (54 cents per share) for Q1 2012, that was down from one year ago when profits reached $80.4 million or 56 cents per share.