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Games blamed as Amazon’s profits fall

Ben Parfitt
Games blamed as Amazon’s profits fall

Despite a 14 per cent year-on-year increase in Amazon’s Q2 revenue at online retail colossus Amazon, the website has reported lower than expected profits for the last 12 months – and video games have been named as one of the chief culprits.

Sales for the period climbed overall reaching $4.65bn – up from $4.06bn in the same quarter a year before. Profit, however, was down 10 per cent at $142m.

Flat sales of media goods such as games, music and books were pegged as the chief offenders for the lower than expected numbers.

"You're seeing an industry slowdown in video games and consoles," CFO Tom Szkutak warned.

The retailer emphasised that the disappointing numbers were in part due to the yearly comparison with 2008 where a number of high-profile game releases – the most notable of which is Rockstar’s Grand Theft Auto IV – brought very strong sales in the category.

The numbers were also lessened by a one-off $51m legal settlement with Toys R Us following a toy sales dispute in North America.

The main area of growth for the retailer was in its Marketplace category  -an area of the site where private sellers are able to trade goods, with Amazon taking a small slice of the payment. Marketplace now accounts for 30 per cent of Amazon’s sales.

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Tags: games , marketplace , fall , video , amazon , q2 , profits

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