Investing.com - There was no redemption for GameStop Friday after it slashed fourth-quarter guidance, raising fears that the videogame retailer is fast becoming irrelevant as gamers shy away from in-store shopping in favor of digital purchases.
GameStop's (NYSE:GME) above-forecast third-quarter earnings and revenue results were overshadowed by lower full-year guidance, sending its shares more than 5% lower.
GameStop forecasts full-year earnings in the range of $2.55 to $2.75, below both consensus of $3.04 a share and prior guidance of $3 to $3.35 a share, suggesting the video game retailer is struggling to win against a shift to digital purchases.
NPD Group, an American market research company, said Friday mobile games and digital content for console and portable platforms were experiencing the most growth in 2018.
GameStop blamed the weaker sales on subdued performance by Activision Blizzard's (NASDAQ:ATVI) "Call of Duty" and sports titles. Activision fell more than 4%.
Rival game developer Take-Two Interactive (NASDAQ:TTWO) was down 1% as downside was limited by news that the company could, in the future, venture into into other areas of the entertainment business beyond gaming, even as its blockbuster video game "Red Redemption 2" has racked up impressive sales since launch.
The company sold 17 million units of "Red Dead Redemption 2" in just eight days since launch, Strauss Zelnick, chairman and CEO of the Rockstar Games parent, told CNBC's Jim Cramer in an interview.