GameStop is blaming the incoming release of PS5 and Xbox Scarlett for declining sales revealed in its fiscal third quarter ended November 2, as reported by GameSpot.
The anticipation for next-gen consoles is mounting as we get closer and closer to their official reveals and launches, slated for Holiday 2020. The hype is reportedly hurting sales, as the video game retailer shared that consumers have stopped investing in hardware since they’re waiting for the newest to ship.
Total revenue was 25.7% down to $1.4 billion, while when it came specifically to hardware, sales dropped by 45.8%. The more bad news is that CEO George Sherman acknowledged that, while this is a situation where many other gaming companies are in too, sales are expected to slide further in future quarters.
GameStop posted a loss of $83.4 million for the quarter, but that doesn’t exclusively depend on hardware sales declining. The revenue from new game sales also dropped (-32.6%), similarly to pre-owned (-13.3%), even though this is believed to be due to digital sales increasing throughout the current generation.
One of the biggest releases this year, Call of Duty: Modern Warfare, has sold 4.75 million digital units for October alone, just in a few days since its October 25, 2019. Borderlands 3 also sold 70% of all its launch copies digitally, a record for 2K Games’ portfolio.
Both these results hint at a change in the way consumers purchase their game content. This is something that GameStop has a bad time with, despite partnerships with digital store owners and platform holders whose voucher (like PlayStation Store, Xbox Store, Steam) is currently also sold at retail.