Would you like to pre-order disappointment? GameStop’s holiday sales sag

gamestop stock

The NPD Group, the electronics market sales tracking firm, is expected to release a dour assessment of the video game industry’s holiday season. Analysts are predicting that console, handheld, and game sales all saw significant year-on-year declines from past Christmas seasons. Remember this, though: The NPD Group’s sales reports are no longer an accurate depiction of the health of the video game industry. It doesn’t reflect the booming digital download trade on mobiles and PCs, nor does it reflect the booming creativity of independent game makers. Those grim sales figures that come in month after month demonstrates one thing unequivocally: That the business that made GameStop one of the world’s most profitable retailers is dead for good.

GameStop reported its holiday sales data on Tuesday morning 48 hours before the NPD Group released game industry data for the holiday period. GameStop’s total sales fell but they didn’t dip too much. Global sales for the nine weeks that ended on Dec. 29 came to $2.88 billion, a drop of close to 5 percent year-on-year. A number of factors contributed to the drop. Console sales fell close to 3 percent while new game sales were down 5 percent. The company’s digital business of downloadable content grew 40 percent, with mobile games bringing in $76.5 million for the period, promising growth but not speedy enough to make up for lost revenue from physical sales.

The poison in GameStop’s well is its used game business. Used game sales dropped nearly 16 percent over the period. The company attributed the dip on “limited inventory due to fewer new titles released throughout 2012 and less promotional activity negatively impact[ing] sales compared to last year.” That is in reality more symptom than cause, though. The truth is that people are spending less and less on physical copies of games. That is the reason that GameStop’s used game inventory is shrinking; people aren’t buying games that can be sold back to GameStop and then resold again at a steep profit.

On a long enough timeline, the erosion of the used game market will kill GameStop. Historically the company has made close to half of its profits on used game sales. Even if sales totals only dip slightly year-on-year, its GameStop’s profits that are really hurt.

What GameStop’s decline will ultimately mean for the video game business is up in the air. It’s possible that game developers will finally see more money from game releases once the secondhand market is eliminated, allowing them to take more creative risks. On the other hand, piracy remains a crippling problem for digitally distributed games.

Emerging Tech

Awesome Tech You Can’t Buy Yet: Plant-based shoes and a ukulele learning aid

Check out our roundup of the best new crowdfunding projects and product announcements that hit the web this week. You may not be able to buy this stuff yet, but it sure is fun to gawk!
Cars

Tesla screens may support YouTube with next software update

Tesla CEO Elon Musk announced today at E3 that the infotainment screens will support YouTube video streaming very soon. This most likely lines up with the latest software update that is expected later this year.
Deals

The best Nintendo Switch deals and bundles for June 2019

Looking to score Nintendo's latest console? We've smoked out the best Nintendo Switch deals, including discounts on bundles that feature must-have games like Super Mario Odyssey, Super Smash Bros. Ultimate, and Zelda: Breath of the Wild.
Digital Trends Live

Digital Trends Live: Florida’s autonomous vehicle law, E3 updates, and more

On this episode of DT Live, we take a look at the biggest trending stories in tech, including Florida allowing fully autonomous vehicles on the road, Atari’s new gaming system, E3 updates, high-speed rail, and more.
Gaming

Niantic Labs sues hackers who help players cheat in Pokémon Go

Niantic Labs has filed a lawsuit against Global++, who is said to be behind the hacked versions of Pokémon Go and Ingress. The legal action comes as the developer is preparing to launch Harry Potter: Wizards Unite.
Gaming

How Epic Games almost made the mistake of ending Fortnite

Former Epic Games production director Rod Fergusson said that he would have canceled Fortnite if he stayed with the developer. The game only started soaring in popularity when the Battle Royale mode was released a few months after launch.
Gaming

New Nintendo Switch models are reportedly already in production and coming soon

The rumored two new Nintendo Switch models have already reportedly entered production. Some of the components were moved out of China and into Southeast Asia, as Nintendo looks to limit the impact of proposed tariffs.
Mobile

Put down the controller and pick up the best phones for gaming on the go

Which phones are the best if all you want to do is play some mobile games? We've done the hard work and put together a list of the best gaming phones on Android and iOS, so you can keep playing and winning.
Gaming

Square Enix has no clue how many episodes Final Fantasy VII Remake will take

The initial release of the Final Fantasy VII Remake on March 3, 2020 will feature the part of the adventure that takes place in Midgar. Square Enix has no idea on how many episodes it will take to tell the full story of the original RPG.
Gaming

Nintendo 3DS nowhere to be seen at E3 2019, but apparently not yet dead

The Nintendo 3DS was missing at E3 2019, but it appears that support for the console will continue. No first-party games are planned for the device, but it offers a collection of titles that may still attract both old and new players.
Gaming

Microsoft reportedly wanted Halo: The Master Chief Collection on PlayStation 4

Microsoft reportedly considered launching Halo: The Master Chief Collection on the PlayStation 4 a few years ago. It remains unclear if the desire for the Halo series to make a platform jump is still there ahead of Halo Infinite.
Computing

Why OLED gaming monitors may be further from reality than we thought

Earlier this year, Dell showed us the promise of an exciting new future for gaming monitors with the reveal of the Alienware 55-inch OLED gaming display. We loved it. But according to new reports, it may never see the light of day.
Deals

Walmart cuts $300 off Dell Inspiron 5680 gaming desktop for gamers on a budget

If you're stashing money but want an upgradeable rig that will go a long way, then this solid deal on the Dell Inspiron Gaming Desktop 5680 with Intel Core i5-8400 is for you. It is now available for only $700 at Walmart.
Deals

Walmart drops sweet $20 discount on the Sony PS4 DualShock 4 Controller

Walmart is offering a $20 discount on the Sony PlayStation 4 DualShock 4 Controller. New features include the touchpad, speaker, and light bar. It's also compatible with Windows-based PCs. This controller was originally priced at $60, but…