GameStop predicts bleak Christmas

gamestop-inside-930x618Bricks and mortar peddler of computer games, GameStop, is predicting a bigger than expected drop in sales for the crucial holidays.

The troubled company is the world’s largest retailer of video games, and has been struggling as more players switch to downloading games on their consoles from buying physical copies.

Chief Operating Officer Tony Bartel warned that revenue from the videogame category, which includes new hardware, software and accessories, is expected to decline in double digits in November and by single digits in December.

Bartel said the company expected revenue from the business to be flat to positive in January.

Hopes that Activision Blizzard’s “Call of Duty” game would pull GameStop’s nadgers out of the fire were also dashed as these are expected to be lower than a year earlier.

GameStop also forecast total sales to decline between 5-10 percent in the current quarter, translating into revenue of $3.17 billion-$3.35 billion.

Analysts on average were expecting revenue of $3.45 billion. The company expected things to be bad this year and it has maintained its full-year profit forecast.

Bartel said the company expects to expand its operating earnings by diversifying its portfolio.

Under Chief Executive Paul Raines, GameStop has been expanding its digital and mobile offerings and snapping up technology brand stores that sell mobile phones and other electronic devices.

Revenue in its technology brand business rose 54.4 percent in the third quarter from a year earlier.

GameStop’s net income fell to $50.8 million in the third quarter ended 29 October from $55.9 million last year.