If you didn’t get what you wanted over the holidays, you’re not alone in your disappointment. GameStop didn’t get the holiday it wanted, either.
The brick-and-mortar video game retailer GameStop reported mixed results for the Christmas period. Sales were down 4.4 percent compared to 2011, which is below the company’s down 3 percent estimate for the fiscal fourth quarter.
That means the Wii U didn’t come to the retailer’s rescue. Even worse, at least for GameStop, used-game sales were down a surprising 15.6 percent. This is on top of a less surprising 5 percent drop in new-game sales.
“While [GameStop's] long-term position remains under scrutiny given the inevitable shift of media consumption online,” said Baird analyst Colin Sebastian, “we believe the company should benefit from a high-quality lineup of core games coinciding with the next-generation console cycle and potential positive store sales in late 2013. Longer-term, we also believe there is option value in the company’s digital initiatives, which are now beginning to bear fruit.”
That fruit comes in the form of $77 million in revenue from the company’s digital ventures, including digital-distribution retailer GameStop Impulse, web games on Kongregate.com, and an upcoming cloud-streaming game service.
Sebastian expects GameStop to launch its streaming platform sometime this year.
In the near term, GameStop is still well positioned to capitalized on the next round of console sales, but it’s clear it’ll have to make more out of its digital prospects if it wishes to keep up beyond that.
GameStop’s stock (GME) is down 4.25 percent to $23.70 a share after today’s announcement.