What Led GameStop To See Disappointing ‘Star Wars Battlefront’ Sales?
You almost never hear anyone talk about a disappointment in a discussion of the revival of the Star Wars franchise. But retailer GameStop did today, telling analysts that there’s been no sign of the Force behind sales of Electronic Arts’ video game Star Wars Battlefront, which was released on November 17.
“We had high expectations that diminished somewhat as it got closer, and then it failed to hit those lowered expectations,” GameStop COO Tony Bartel told analysts. The comments, plus lower than expected financials for the quarter that ended in October, sent the chain’s shares down 4.2%. Electronic Arts shares fell 4.8%
GameStop isn’t giving up hope. “We expect Star Wars to be one of the strongest titles for the holiday season,” especially around December 18 when Disney releases Star Wars: The Force Awakens, CFO Robert Lloyd says. “So we expect it to get back towards on-track for our expectations.”
Bartel added that GameStop plans to push the title hard on Black Friday, and is “the only retailer that has it with significant discount, which is also going to guide sales.”
Some analysts say that the retailer’s experience shouldn’t worry those who are heavily invested in Star Wars Inc. The chain also said that it was disappointed in sales of two other recent releases: Halo 5 and Assassin’s Creed.
That may simply reflect the “significant, industry-wide increase in digital downloads so far this year,” Barclays analyst Christopher Merwin says. As a result, “it’s very likely that an increase in digital sales for Star Wars helped contribute to the lower-than-expected physical sales of the title for GameStop.” He still expects Electronic Arts to sell 13 million copies of the game in the fiscal year that ends in March.
Cowen and Co’s Doug Creutz shares the view that GameStop is suffering from competition from digital downloads. It’s “unlikely to us that what amounts to a buyers strike is really going on amidst the most powerful hardware cycle on record,” he says.
Sales at Amazon suggest that demand for Star Wars Battlefront “remains robust and that the game should hit or exceed” 13 million for EA’s fiscal year.
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