Nov 21, 2014 01:59 AM EST
GameStop Corp (GME.N) posted quarterly revenue and profit well below analysts' estimates as the delayed release of "Assassin's Creed Unity," and flagging videogame software sales more than offset high demand for PlayStation 4 and Xbox One consoles.
Shares of the world's largest retailer of video game products fell 11 percent in extended trading after it also lowered the upper end of its full-year profit forecast on Thursday.
Release of "Assassin's Creed Unity," developed by France's Ubisoft Entertainment SA (UBIP.PA), was delayed by about two weeks and hit stores in North America only on Nov. 11.
GameStop narrowed its fiscal 2014 earnings forecast to $3.40-$3.55 per share from $3.40-$3.70.
Sales of new game software fell 34.4 percent in the quarter as year-ago period included hit games such as Grand Theft Auto V and Battlefield 4.
Games such as "Destiny" and "The Evil Within," which were launched in October, sold 42 percent fewer units, compared with a year earlier, market research firm NPD said in an e-mail.
"I would anticipate that we will begin to see software growth as early as the fourth quarter and definitely in the first quarter of next year," President Tony Bartel said.
Sales of older games, however, continued to drop.
"There was a 58 percent Xbox 360 and PS3 hardware and software that we experienced year-to-date which is greater than what we anticipated," Bartel said.
Sales of new hardware jumped 147.4 percent, driven by demand for Sony Corp's (6758.T) PlayStation 4 and Microsoft Corp's (MSFT.O) Xbox One.
"These consoles have had a great start as cumulative sales are currently over 70 percent higher than the combined first year totals of Xbox 360 and PS3," the NDP report said.
GameStop's net income dropped to $56.4 million, or 50 cents per share, in the third quarter ended Nov. 1, from $68.6 million, or 58 cents per share, a year earlier.
Excluding items, the company earned 57 cents per share.
The Grapevine, Texas-based company's revenue fell to $2.09 billion from $2.11 billion.
Analysts on average had expected revenue of $2.2 billion of profit of 61 cents per share, according to Thomson Reuters I/B/E/S.
(Additional reporting by Malathi Nayak in San Francisco; Editing by Sriraj Kalluvila and Richard Chang)
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