NEW YORK ( TheStreet) -- GameStop's (GME) - Get Reportoutlook for the new year disappointed investors hoping the video game chain would prosper amid strong sales of the new Xbox One and PlayStation 4 gaming consoles.
In order for GameStop to prove the latest skeptics wrong, several of the gaming industry's marquee title releases for the year will have to reach blockbuster status and sell over a million units.
On Thursday, GameStop reported earnings of $2.15 a share, falling short of the $2.16 a share consensus. Sales of the latest software, especially from Nintendo (NTDOY) , led the way for GameStop and offset sluggish demand at its stores for new hardware. Same-store sales in the U.S. and international fell by 1.4% and 2.6%, respectively.
GameStop's outlook of $3.66 a share to $3.80 a share for the year was well short of the $4.04 a share consensus, with the company pinning blame on the impact of the strong dollar. Investors sent the stock down by about 5% in after-hours trading.
GameStop's tepid outlook came as a surprise to investors who had gotten used to solid and improving industry trends. According to NPD, the retail video game industry grew 8% in the month of February year-over-year thanks to a 10% boost to hardware. Overall sales of actual games from retailers rose 6%, bucking an industry trend of slumping game sales since the release of new consoles in November 2013.
TheStreet takes a look at some of the industry's rumored biggest game releases of the year, all of which could help GameStop beat its guidance and rejuvenate the stock.
Take-Two (TTWO) - Get Report is banking on Battleborn, developed by its 2K Games division, to fill the void caused by the lack of a new Grand Theft Auto release over the next 12 months. It's hard to believe that BattleBorn will be met with a chilly reception by gamers -- every year since 2007, Take-Two has launched at least one new million-unit-selling franchise.
Battleborn is a blended genre game that combines first-person shooting, cooperative combat and an expansive collection of characters. The game is being looked at as a potential hit due to its immersive co-op game play and humorous storyline.
This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.