Nintendo Switch drives GameStop global sales to just shy of $2bn for latest quarter
Hardware and software demand counters slight decline in pre-owned sales
The Nintendo Switch continues to play a vital role in retail with GameStop's latest financial reports, highlighting the success of the console as part of the company's positive performance.
"Our third quarter sales results were driven by strong software demand and continued momentum for Nintendo Switch and collectables," said Dan DeMatteo, interim chief executive officer.
According to the most recent GameStop financials, hardware sales were up 8.8% from $284.4 million to $309 million, led by a demand for the Switch.
Software sales increased to $649.9 million, up from $616.6 million amounting to 5.4% growth year-on-year.
Meanwhile, pre-owned sales declined 2.4% from $470 million to $458.5 million. GameStop recently attempted to revitalise this business with the unlimited use Power Pass service, but temporarily paused this initiative shortly after launch citing "program limitations".
Collectables remained highly profitable in the most recent quarter with sales increasing by 26.5% from $109.4 million to $138.4 million. Sales for the year are on track to meet revenue target of $650 million to $700 million.
Digital sales increased 11.9% excluding the third quarter 2016 revenues from Kongregate which GameStop sold in July 2017. Accounting for revenue lost through the sale of the gaming portal, digital sales declined 16.8% to $37.2 million.
In total, global sales for GameStop increased 1.5% to $1.99 billion. Hardware sales accounted for 15.6%, software for 32.7%, gaming accessories for 6.9%, collectables for 6.9%, digital sales for 1.9% and pre-owned sales for 23%.
Net earnings for the quarter were $59.4 million. Adjusted earnings were $55.1 million compared to $50.8 million over the same period in 2016.
Looking toward the next quarter, DeMatteo said: "We are encouraged by the initial customer response to Microsoft's Xbox One X, and believe that the holiday season results will be driven by new console hardware and collectables. Our Technology Brands AT&T Wireless business underperformed our expectations for the third quarter and we anticipate that the fourth quarter results will be highly dependent on the availability of Apple's next-generation iPhone X."