Videogame maker GameStop posts disappointing profit

NEW YORK (Reuters) - Retailer GameStop Corp, the biggest U.S. videogame retailer, said on Thursday that quarterly profit fell 32 percent as a drop in demand for new consoles and the absence of any breakout hits hurt sales.

GameStop also cut its full-year forecast, citing concerns about consumer spending and the delay of some key titles. The drop in earnings and the disappointing outlook drove the company's shares down nearly 6 percent.

Chief Executive Daniel DeMatteo said in an interview that consumers had cut back on spending more than expected, and so the company was taking a "cautious stance" on the rest of its fiscal year.

"At the beginning of last quarter, we knew a lot of big titles that were going to be releasing in the back half of the year," he said. "Since that time, several have slipped into (next year). Also we're still concerned over the economy and consumer spending."

Among the titles that have been delayed are "Bioshock 2," "StarCraft II" and "Splinter Cell: Conviction," the company said.

But DeMatteo also pointed to some brighter developments, including releases such as "Call of Duty: Modern Warfare 2," "Assassin's Creed 2" and "Halo 3" and, just this week, the announcement that Sony Corp would cut the price on existing and new PlayStation 3 game consoles.

DeMatteo and Chief Operating Officer Paul Raines said such a price cut, in a normal economic environment, could double sales of the console.

While that may not hold true under current conditions, DeMatteo said it "would definitely help us" and could also increase pressure on Microsoft Corp to cut prices on its Xbox 360, and Nintendo Co on its Wii.

Slow console sales were among the factors that cut overall revenue by 3.7 percent to $1.74 billion in the second quarter ended August 1, the company said.

That figure that was slightly above the analysts' average forecast of $1.73 billion, as compiled by Reuters Estimates.

Earnings fell to $38.7 million, or 23 cents a share, from $57.2 million, or 34 cents a share, a year earlier. Analysts had forecast 28 cents a share.

GameStop now expects fiscal-year earnings of $2.40 to $2.64 a share. Previously, it forecast $2.83 to $2.93.

On the New York Stock Exchange, GameStop shares were down 5.6 percent at $23.76.

(Reporting by Paul Thomasch, editing by Gerald E. McCormick and Lisa Von Ahn)