Console shortages blamed as US retailers miss financial projections

Key US videogame retailers Electronics Boutique and GameStop have both dropped their financial projections for the fourth quarter, blaming hardware shortages of the PS2 and Xbox in the crucial pre-Christmas period.

While both chains saw rises in both overall sales and like for like sales in the nine weeks leading up to January 1st, these increases fell short of projections - especially for GameStop, whose like for like sales rose only 0.9 per cent, compared with projections of 6 to 9 per cent.

Overall sales for GameStop rose 13.6 per cent during the period, hitting $577.7 million, but while software sales rose 15 per cent, the company's console hardware sales dropped by 40 per cent on a like for like basis in December.

GameStop dramatically illustrated the impact of the hardware shortage in its announcement of the holiday sales numbers, pointing out that in the last weekend before Christmas, the company's 1768 retail stores sold only 186 Xbox and PS2 units.

Electronics Boutique was also hard hit, with same store sales rising only 3.6 per cent, although total sales jumped 22.3 per cent to $666 million - although the company reported that its margins have been hurt by the lack of hardware, as it also lost out on sales of accessories and software which normally go along with a console purchase.

GameStop's Q4 guidance has been dropped to $0.68 - $0.70 EPS, while EB now expects that its figures for the quarter will come in at the low end of its previous guidance figures of $1.62 - $1.72 EPS.

Yesterday, leading UK retail chain GAME Group also announced its figures for the Christmas period, revealing that it too was severely impacted by the PS2 hardware shortage, with like for like sales falling further than expected in the UK and Ireland.