GameStop today reported that new software sales were down by 9.3 percent, a downturn that was attributed to a tough comparison to last year when Destiny and Super Smash Bros. came to market. But in an earnings call this morning, GameStop executives shared more insight into why new game sales came up short.

High-profile new releases like Halo 5: Guardians and Assassin’s Creed Syndicate underperformed during the quarter ended October 31, GameStop CEO Paul Raines told investors and analysts. Star Wars Battlefront launched on November 17, outside of that reporting period, but sales of this game, too, came in below what the company had modeled, GameStop president Tony Bartel added.
Bartel went on to say that some in the industry believe Halo 5’s digital sales–for which GameStop does not earn a penny–were significantly higher, on a percentage basis, than past entries in the series. This line of thinking comes from a discrepancy between Microsoft’s reported $400 million in Halo 5 sales and an NPD report Bartel cited that said Halo 5 only generated $119 million.
The variance to NPD is reconciled, Bartel said, by the fact that NPD only reports US sales, as well as a broader inclusion of SKUs beyond those tracked by NPD, two additional days of sales in Microsoft’s announcement versus NPD’s reporting period, and sales that were reported by publishers but not retailers.
Bartel went on to say there is no reason to believe Halo 5’s digital sales were higher than what they were modeling, based on conversations with Microsoft. “We are in constant discussions with all publishers and platform-holders and we believe that all major full-game titles launched in this quarter were in line with previously announced digital download levels,” he said.

“We are in full understanding and full belief that there is no game that was launched this quarter that was materially above a normal digital percent at launch.”
For its part, Microsoft said Halo 5 became the “best-selling digital game ever” through the Xbox Store during its launch week.
On the subject of Battlefront’s poor performance at GameStop, Bartel said, “We’re not going to quantify it in terms of actual numbers, but we had high expectations that diminished somewhat as it got closer and it failed to hit those lowered expectations.”
Another possibility of why Battlefront underperformed at GameStop could be because GameStop’s Black Friday advertisement leaked a full week before the game was released, management said. The Battlefront PS4 bundle is one of the retailer’s featured deals during the shopping bonanza, which could mean that some fans saw the ad and withheld their purchase until Black Friday.

Later in the call, Bartel said he anticipates that Battlefront will rebound, in part as a result of the buzz surroundingStar Wars: The Force Awakens. Overall, Battlefront is expected to be one the retailer’s top-selling titles during GameStop’s holiday quarter, when the retailer does 60 percent of its annual business.
No additional insight into Syndicate’s performance was shared by GameStop management. However, Ubisoft itself previously acknowledged that first-week sales were down in part because people may have been scared away by the many problems that Assassin’s Creed Syndicate suffered at release.
New releases that did reach GameStop’s sales expectations included Call of Duty: Black Ops III and Fallout 4. For more on GameStop’s latest quarter, during which the company’s revenue and profit fell, read GameSpot’s complete report.

Leave a Reply