GameStop sales drop below expectations as it warns on cheap digital games

The US-based gaming specialist revealed software sales declined by 34.4% during the quarter ending November 1, while sales across the business dropped 0.7% year-on-year to $2.09bn (£1.33bn).

GameStop revealed digital receipts increased 52.4% during the period to $210.3m (£134m) on the back of growth of downloadable content, platform currency and international digital sales.

GameStop president Tony Bartel warned during an analysts call that the gaming industry needed to guard against selling digital games too cheaply, according to financial markets website Seeking Alpha.

He said: “We want to help ensure that our industry does not make the same mistake as other entertainment categories by driving the perceived value of digital goods significantly below that of a physical game.”

In-store sales were hurt during the quarter by the delayed release of Assassin’s Creed Unity, the latest update of one of the gaming industry’s most successful franchises.

GameStop did record strong growth in hardware as sales surged 147.4%, outpacing industry growth of 102.4%.

In the 12 months since launch, sales of the Sony Playstation 4 and Microsoft Xbox One are proportionally ahead of sales of their predecessors over the same period.

GameStop chief executive Paul Raines said: “As we look at the holiday quarter, we are focused on relentlessly applying our competitive advantages: convenience, strong CRM, knowledgeable associates and value through our unique forms of currency, which include buy-sell-trade and the new PowerUp Rewards credit card, to deliver a successful quarter.”

GameStop previously competed with UK retailer Game in Spain, but has since pulled out of the Spanish market and sold its stores to Game.

Game is only taking on profitable shops and will continue to operate 45 out of GameStop’s 102 Spanish stores.