‘Halo 5,’ ‘Star Wars Battlefront’: Underperforming or Digital Sales Underestimated?

E3 Microsoft Halo 5
Courtesy of Microsoft

Video-game retailer GameStop reported Monday that new software sales were down 9.3 percent for the third quarter versus last year and that many high-profile games were underperforming.

But games like “Halo 5,” “Assassin’s Creed Syndicate” and the newly released “Star Wars Battlefront” may just be suffering from an underestimation of how much digital sales are driving their bottom line.

were not selling well based on what had been modeled by the company said GameStop CEO Paul Raines and GameStop president Tony Bartel in yesterday’s earnings call.

Regarding “Halo 5,” many believe that it’s digital sales – which GameStop sees no profit from – where much higher on a percentage basis. Microsoft  claimed “Halo 5” became the “best-selling digital game ever” during its launch week.

Take the discrepancy between Microsoft’s reported $400 million in sales for “Halo 5” and an NPD report that claimed the game only earned $119 million. GameStop president Tony Bartel  explained the variance by saying NPD only reports U.S. sales, didn’t include data from retailers, and  didn’t take into account two additional days of sales that Microsoft counted.

Bartel added there was no reason to believe the sci-fi shooter’s digital sales had exceeded estimations that digital would only comprise 20-25% of digital sales.

“We are in constant discussions with all publishers and platform-holders and we believe that all major full-game titles launched in this quarter were in line with previously announced digital download levels,” Bartel said.

Cowen & Company issued a note to investors following GameStop’s call stating the data was off and that GameStop was likely underselling the digital sales of “Halo 5.”

“We especially have a hard time believing that ‘Halo 5’ digital units remain in the 20-25% range, as GameStop management suggested on the call,” the report said. “GameStop gave some other potential reasons for the disconnect between NPD data and Microsoft’s post-launch press release, but we don’t believe they are sufficient to explain the size of the gap.”

The report went on to say that the underperformance of these games was likely because of digital downloads.

“It seems unlikely to us that what amounts to a buyers’ strike is really going on amidst the most powerful hardware cycle on record,” the report added. “We suspect that the average underperformance vs. their expectations is really being driven by an acceleration of digital downloads.”

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  1. Halo 5 says:

    Wow the hype is actually justified for once… incredible smooth beautiful exciting are just some of the words that spring to mind. So Fun, Smooth & Tight. Halo 5 is a masterpiece in design and execution.

  2. Ronald Cisneros says:

    PLAIN AND SIMPLE…

    *pauses for EA and the rest of the gaming dev companies TO PAY ATTENTION*

    PEOPLE DO NOT WANT TO PAY $110 FOR A GAME THAT SHOULD COST PROBABLY $70. NOT WHEN YOU ARE RIPPING OFF THE LOYAL GAMER FANS IN SUCH A BLATANT MANNER. YES I AM TALKING ABOUT DLC. BATTLEFRONT HAS THE MOST EXPENSIVE DLC TO DATE. IT IS LITERALLY SHOVED DOWN YOUR THROAT BY IGN YOUTUBE VIDEOS, GAMESTOP SALES PEOPLE, HECK, IT’S EVEN PLASTERED ALL OVER THE MAIN GAME SCREEN WHEN YOU BOOT IT UP. YOU DON’T HOLD MORE THAN HALF OF THE GAME RANSOM FOR ALMOST DOUBLE THE AMOUNT FROM PLAYERS WHO FORK OVER THEIR HARD EARNED CASH FOR THE GAME IN THE FIRST PLACE. IT’S INSULTING, DISHONEST AND PLAIN BAD BUSINESS.

    THIS IS WHY.

    STOP IT.

    RELEASE THE FULL GAME AT ONCE WITH EVERYTHING IN IT. THEN LATER ADD SOME DLC; A FEW EXTRAS HERE AND THERE. THE INITIAL PURCHASE HAS TO BE WORTH IT. HECK A $120 GAME MIGHT BE WORTH IT…IF YOU BUILD THE VALUE. BATTLEFRONT AS RELEASED IS WORTH $30.

  3. 1) Bartel added there was no reason to believe the sci-fi shooter’s digital sales had exceeded estimations that digital would only comprise 20-25% of digital sales.

    I think you need to re-work the sentence, I get the gist, but it’s not worded right :D

    2) 100% agree that Gamestop is trying to down-play digital sales. It killed their PC business, there is no reason to suspect that it won’t eventually kill their console business as well.

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