Video game retailer GameStop is seeing a change in its fortunes. The outfit reported a 7 percent rise in quarterly revenue, driven by growth in its mobile business and demand for new games consoles made by Sony and Microsoft.
GameStop's shares rose as much as 5 percent in extended trading on Thursday, after the company also reported a better-than-expected first-quarter profit. GameStop has been suffering as video game software sales fell and has stepped up sales of used games and hardware in recent years, as well as expanding its range of digital and mobile products to include iOS and Android devices in some stores.
The company’s hardware business increased 81 percent to $438 million for the quarter ended May 3. Revenue from its mobile and consumer electronics business doubled to $102.2 million. Sales of new game software fell 20.4 percent, hurt by fewer launches of popular video game titles. The release of new games, however, could reverse this trend. Pre-orders for next generation consoles have been strong.
GameStop President Tony Bartel, speaking on a post-earnings conference call, said he expected a recovery in software sales to begin in the current quarter, with the release of games such as Ubisoft Entertainment SA's "Watch Dogs."
"Watch Dogs" is slated for release on May 27, to be followed later in the year by Activision Blizzard upcoming releases, including sci-fi game "Destiny" and military-action shooter "Call of Duty: Advanced Warfare.
Revenue rose to $1.99 billion from $1.87 billion. Analysts on average had estimated a profit of 57 cents per share on revenue of $2.03 billion.