EB Games Owner Suffers Major Revenue Loss
EB Games parent company GameStop’s shares fell close to 23% in late trading after the game retailer announced it is halting its quarterly dividend due to a decline in sales.
Net sales fell $1.55 billion from $1.79 billion in the same period last year, and the company expects its full-year sales to fall between 5% and 10%.
Sales of gaming hardware fell 35% caused by falling demand for the Xbox One and PlayStation 4 as Microsoft and Sony prepare to release next-generation consoles in the coming year.
Additionally, software revenue dropped 4.3%, as many consumers move to downloadable games and cloud-based gaming.
Despite revenue falling short of Wall Street expectations, the company also reported a net income of US$6.8 million — down from US$28.2 million in the same period a year earlier.
GameStop fell to US$5.99 in extended trading on Tuesday, the stock’s lowest point in 16 years according to reports.