Tuesday, June 16, 2009
Slump In Video Games Sales Bruises Best Buy Profit
With millions of Americans cutting cost at every corner, it's easy to assume In-home entertainment items, particularly video games and movies, would enjoy a nice bump in sales.
For months, the video game industry thrived , to the delight of electronic retailers such as Best Buy (NYSE:BBY) and GameStop (NYSE:GME) reaped the rewards of the trend. Some analysts expected Circuit City liquidation to drive more customers to Best Buy, but evidently, the shift couldn't compensate for the end of the sales streak.
According to an article in today's Wall Street Journal, video games are one of several culprits for Best Buy's shrinking profit, including digital cameras and appliances.Its Stock shares are down 43 cents compared to the same fiscal quarter last year.An excerpt reads:
Best Buy has seen some benefit in the form of customers gained from the bankruptcy and subsequent liquidation of Circuit City Stores Inc. But it said customer traffic in U.S. stores was lower than a year earlier and its average sales ticket was flat, hurt by decreases in video games, appliances, digital cameras and movies.
With more kids spending more time at home during summer break, perhaps Best Buy will enjoy its own Christmas in July. Bored kids inevitably turn to electronic entertainment , the only question is: Will they be content to play the same games they've had for months, or will they spend some of their hard-earned allowance on the latest game for Sony PS3 or XBox 360? Electronic retailers are hoping it's the latter of the two.
By Matt O'Hern at 01:00 PM | Comments (0)