BOSTON (AP) — Shares of GameStop Corp. fell to their lowest level in nearly two-and-half years on Friday after an industry report showed a sharp decline in video game sales last month.
THE SPARK: A report released after markets closed Thursday by market tracker NPD Group said that U.S. retail sales of video-game hardware, software and accessories fell 28 percent in May to $517 million. It was the sixth straight month of decline.
Sales of console and portable software — the video games themselves — fell 32 percent from a year earlier to $255 million, while sales of hardware fell 39 percent to $139 million. That was offset partly by a 7 percent increase in sales of accessories, to $122 million.
THE BIG PICTURE: GameStop, based in Grapevine, Texas, is the world's largest video game retailer, so it's vulnerable to the industry wide downturn documented in the recent monthly reports by NPD.
Last month, GameStop reported a 10 percent decline in first-quarter earnings as customer traffic in its stores slowed. Its sales outlook also disappointed Wall Street. The company said sales of used, mobile and digital products fell slightly, while sales of new games and systems dropped more than expected.
SHARE ACTION: Shares of GameStop fell 42 cents, or 2.4 percent, to $17.32 in morning trading. Earlier in the session, the stock traded as low as $17.11. That's the lowest level since February 2010. The stock hit a 52-week high of $27.80 last July.