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GameStop Shares Tumble On Weak Forecast

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(Reuters) – GameStop, the world’s largest retailer of video games, forecast first-quarter revenue below analysts’ estimates, blaming a lack of big video game releases and weaker hardware sales.

The company’s shares (GME) fell about 5% at $28.80 in after-market trading on Thursday. They had declined as much as 8.3% earlier.

GameStop said it expects total sales to decline between 4 and 7% in the current quarter, translating into revenue of $1.92 billion-$1.98 billion.

Analysts on average were expecting revenue of $2.09 billion, according to Thomson Reuters I/B/E/S.

GameStop also forecast same-store sales to fall 7% to 9% in the first quarter.

Weaker hardware sales and a lack of big videogame releases, compared to the same period a year earlier, are likely to affect results, chief operating officer Tony Bartel said in an interview.

Video game hardware sales dropped by 23% in February 2016 from a year earlier, when Nintendo launched its 3DS handheld-game consoles, according to research firm NPD.

GameStop’s total revenue rose 1.4% to $3.53 billion in the fourth quarter ended Jan. 30 but missed the average analyst expectation of $3.57 billion.

The company’s net income rose to $247.8 million, or $2.36 per share, in the quarter, from $244.1 million, or $2.23 per share, a year earlier.

Excluding items, the company earned $2.40 per share.