UPDATE 2-GameStop Q1 same-store sales dive but outperform market

Thu May 10, 2012 8:45pm EDT

* Q1 same-store sales down 12.5 pct on yr

* Decline blamed on lack of blockbuster game launches

* Company doing a "good job" relative to industry -analyst

By Malathi Nayak

May 10 (Reuters) - GameStop Corp's same-store sales plummeted 12.5 percent year on year and earnings dipped in the first quarter, as the U.S. retail chain struggled with slowing video game hardware and software sales.

The company, which announced rudimentary earnings ahead of fuller results to be unveiled May 17, reported earnings of 54 cents a share in the first quarter, compared to 56 cents a year earlier.

It blamed the quarterly sales slide to the lack of blockbuster game launches.

Sterne Agee analyst Arvind Bhatia said GameStop's earnings managed to fall in line with analysts' expectations.

"It was a pretty tough quarter for the industry in general but I think relative to that Gamestop actually did a really good job," Bhatia said.

The company's announcement came shortly after market research firm NPD's report showed a 32 percent decline in total U.S. sales of videogame hardware and software in April, after similar declines throughout the first quarter.

Games software sales were down 42 percent last month, the report said.

Gamestop wanted to get the word out that their numbers have been "significantly outperforming," Bhatia said.

Sales of traditional video game products such as consoles have been struggling globally as gamers turn to lower-priced online offerings and spend more time on their tablets and phones. GameStop has weathered the trend by focusing on selling games to console owners.

Video game publishers are reluctant to make big investments in new offerings as they wait for a jump into a next generation of consoles.

Nintendo will come out with its follow-up to the Wii console, the Wii U, for the holiday shopping season. This is the first new home console in years, and GameStop expects it to boost sales of games and hardware.

"We're just in a kind of an odd spot in game history because we've never been this long in a console cycle," Wedbush Securities analyst Michael Pachter said.

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