GameStop blames profit dip on crowded videogame market

“Consumers were unable to fund the products that they wanted,” explains president

Videogame consumers are buckling under the pressure of keeping up with the latest releases on shrinking budgets, says GameStop. Reporting lower-than-anticipated revenues in its latest fiscal quarter, the retail giant told Gamasutra it believes the industry has suffered from a case of too many options and too little cash.

"The quarter presented some challenges in topline, due to a cash-strapped consumer that could not afford all of the good titles released during the quarter," said GameStop CEO Paul Raines in an earnings call.

Not that GameStop has suffered too much. Analyzing its fiscal numbers from the quarter ending October 29, 2011, it reported revenues of $1.95 billion (up 2.5% year-over-year); and only a 1.5% dip in profits of $53.9 million. Key earners for the company included Batman: Arkham City, Gears of War 3, Battlefield 3, Dead Island, and Madden NFL 12.

GameStop president Tony Bartel explained the slight drop in profits, noting: “We had expectations for strong sales due to the great title lineup and record reservations. But we found that consumers were unable to fund the products that they wanted, as these strong titles rolled out week after week."

GameStop's analysis makes sense. This year has been one of the busiest for AAA titles, and the recent release of Uncharted 3: Drake's Deception, The Elder Scrolls V: Skyrim, Assassin's Creed: Revelations, Modern Warfare 3, Saints Row: The Third – not to mention the impending arrival of The Legend of Zelda: Skyward Sword, Star Wars: The Old Republic, Just Dance 3, and a whack of other games – is making it hard for the average, non-billionaire to keep up. But then, cluttered release schedules tend to boost the sale of pre-owned copies, so we're sure GameStop will do just fine.

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