Shout out to our sponsor Movement Watches. Get multiple watches in one with bands you can switch out for a whole new look. Because who needs to buy a whole new watch for every occasion? Get 15% off your entire purchase at MVMTWatches.com/theknow Welcome to The Know! I’m Ashley Jenkins, I’m Mica Burton, What do some of the years biggest triple A games and Gamestop have in common? Well, neither of them are doing particularly well this fall. Whoops! Who knew? Yet another bad quarter for the massive video game retailer Gamestop [who] is now blaming one title’s under performance in particular for its poor sales Call of Duty: Infinite Warfare. Ah, the internet’s favourite hate object. This news comes from Gamestop’s just-posted quarterly earnings report following a call yesterday with investors. In that call they revealed that overall revenue was down three percent from the same quarter last year but more importantly new software sales were down nearly ten percent which is kind of surprising considering that’s when most of the year’s games are released. That jives pretty well with reports from around the industry that, for some reason, people just aren’t buying some of 2016’s fall blockbusters. The last couple of weeks we learned that Titanfall 2, Watch_Dogs 2, Dishonoured 2, Gears of War 4, and Infinite Warfare have all taken a hit compared to previous entries. And according to Gamestop, Infinite Warfare is the one that really screwed them over. Management said during the call that this year’s Call of Duty entry did a fair bit worse than they had projected which has contributed to those slumping software sales. Press X to get burned. Typically they make those projections based on how comparable titles have done in the years prior, so that means Infinite Warfare is selling significantly worse than Black Ops 3 did in 2015 which is something we’ve also heard out of the UK. A couple of weeks back, UK retail watchdog GFK Chart Track reported that Infinite Warfare’s week one physical sales were down 48% compared to Black Ops 3’s.
That’s a lot of percents! That’s a lot of percents!! Gamestop didn’t give any specific details about how bad Infinite Warfare is doing at retail but there are some other telling signs about the game’s under-performance. Like the fact that Gamestop is offering a new promotion this week where they’ll give you the game for one dollar if you trade in one of twenty titles which, generally speaking, isn’t something you do when a game is selling well. Y’know, just it seems kind of like a bad omen. Those titles include more notable high-profile games like Battlefield 1, Dishonoured 2, Skyrim Special Edition, Titanfall 2 and Watch_Dogs 2, but also has some headscratchers, like World of Final Fantasy, Farming Simulator 17, Dragon Quest Builders and WWE 2K17. That means they’ve got a ridiculous surplus of new Infinite Warfare copies on shelves and any of those other twenty would be preferable for the retailer. If you’re really interested in taking advantage of it, that promotion ends today by the way. Well, so, get right down to your Gamestop and get your dollar Call of Duty’s! Take yer farming simulator with ya! Now, we should be clear here an under-performing Infinite Warfare is still probably doing decent numbers for Gamestop. Because Call of Duty sales are typically bananas and Gamestop probably isn’t being entirely genuine here because their sales have been down consistently before this quarter anyway. They can blame Call of Duty, and yes, it is selling worse than the last entry in the series did however, it’s not like it’s the only thing that’s disappointing for them. But come on, everybody needs a good scapegoat, am I right? Right.
The recently published Q2 earnings report covering the quarter that ended in July showed that their sales were down for that period as well. Overall, global revenue was down 7% compared to the same quarter in 2015 with even used game sales falling short of their projections. So, Q3’s new report isn’t that different from what they’ve already been doing in the past. They just had a better scapegoat in Infinite Warfare! In fact, this isn’t the first time they tried to blame a game for a lack lustre business period. They’ve done it before! Back in fall of 2015, they laid similar blame at the feet of three separate titles. Star Wars Battlefront, Halo 5 and Assassin’s Creed Syndicate. The last two games in the list aren’t all that shocking but Battlefront went on to sell 14 million copies. That’s still a lot of copies! That’s a lot of millions, guys. EA even launched back at Gamestop after that story went public, saying everything was on target with what they’d always believed and sales were just fine. Although they never said what they had expected specifically… It’s kind of like with Activision saying “No, no, no! Call of Duty sales are what we projected.” “We’re not going to tell you what we projected, but, uh, it’s definitely within them!” “It’s fine guys, just believe us!” So, while it’s probably true that Infinite Warfare and other titles that are ‘360 no-scope’ in Gamestop sales numbers it’s also a sign that, frankly, more people are moving to digital purchases every year and Gamestop is failing to adjust their model. Analyst’s super-data predicts that out of 40 billion dollars in sales generated throughout the 2016 holiday season More than 55% of those are going to digital, a number that’s steadily growing. There were more than likely warning signs about Call of Duty: Infinite Warfare. Preorders form the game were reportedly down quite a bit compared to Black Ops 3 for instance But on top of that, there are other games selling far better than anybody predicted. Battlefield 1’s projections increased up to 16 million after that game launched. And well, Skyrim Special Edition is one of Betheseda’s best launches ever! Cause why release a new game when you can just rerelease a game? Yeah, it works! Gamestop even said that Pokemon Sun and Moon did way better than they expected. So good, actually, that it is the most preordered game the retailer has had in the last five years! So, all in all, it’s a little bit silly to lay the problems of the physical games business at the feet of one specific game, even if that game is suffering at retail, especially since history seems to keep repeating itself every single quarter and there isn’t a Call of Duty game to blame every quarter. Yeah, but “noooo, Call of Duty is killing Gamestop! Oh nooo!” No, just physical sales. And I get, everyone is going digital. The fact that PC has moved almost entirely digital has probably hamstrung a lot of retailers. Amazon has just announced that they’re taking used games now, or they’re doing like a whole used-games business and that’s gonna just chew into Gamestop’s lunch even more because that’s now like their main thing, right? And who needs to go outside when Amazon delivers it to your door? Right?
What do you guys think of old Gamestop blaming its problems on Call of Duty: Infinite Warfare? Will they end up like Blockbuster? Will it be Gamestop and Blockbuster holding hands in the afterlife? Oh no!
Let us know in the comments! Yeah, and for future updates on the business of the gaming industry, cause that’s always a fun time, like this video and subscribe to The Know. Thanks to Movement Watches for sponsoring this update. Movement watches are made with versatility in mind, because you don’t want to buy a new watch for every occasion. Nah! This way, if you’re wearing brown shoes, you can switch out your metal band for a brown leather band and bam! It’s like a new watch.
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