After Sluggish Quarter GameStop Looks To New Consoles And Ventures

Investors didn't think GameStop's start to the year was all too fun.
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Investors didn't think GameStop's (GME) - Get Report start to the year was all too fun. Shares of the retailer of videogames, wireless devices and collectable toys plunged as much as six percent on Friday after reporting same-store sales at its core gaming retail stores fell 6.2 percent due to weak demand for new consoles and videogames. Same-store sales for GameStop's videogame business in the important U.S. market, which numbers over 3,900 stores, declined 6.6 percent. Sales at GameStop's international games division, which boasts over 2,000 stores across Canada, Australia and Europe, declined by a more modest 4.9 percent. GameStop delivered first quarter earnings of $0.66 a share, beating Wall Street estimates of $0.62 a share. For the second quarter, the company expects a revenue decline of one to four percent and earnings of $0.23 a share to $0.30 a share. Wall Street had anticipated $0.33 a share. Given the performance of the videogame market recently, GameStop's results and second quarter outlook shouldn't exactly come as a surprise. Gamers spent $509.5 million on video game hardware and software-related products in the U.S. in April, a 15 percent year-over-year decline from the $598.1 million they spent last year. Hardware sales fell 23 percent to $142.1 million from $183.7 million, while software sales declined 21 percent to $203.9 million from $256.7 million. Game and console accessory sales were a bright spot in an otherwise bleak April, rising four percent to $157.6 million. The trajectory of GameStop's games business could change real soon though. TheStreet's Brian Sozzi reports from New York.