A ‘Call of Duty: Vanguard’ launch party in London last November.
Photo: Joe Maher/Getty Images
The biggest videogame releases during the holiday season apparently weren’t enough to inspire gamers to crank things up.
Turtle Beach, which specializes in headphones designed for gaming, said late Wednesday that revenue for the full year 2021 will come in around $365 million, the low end of its previously issued forecast. That indicates fourth-quarter revenue of around $108 million, which is about 6% shy of Wall Street’s forecasts and down nearly 19% from the same period a year earlier. Turtle Beach shares fell 3% on Thursday.
The recent weakness isn’t a major surprise. Turtle Beach’s sales have been in a slump since mid-2021 as the company began to face challenging comparisons to the pandemic-fueled gaming boom in 2020 along with the same shortages and supply-chain disruptions plaguing the rest of the electronics industry. But a fresh problem has arisen too: Some major game releases haven’t been up to snuff.
Citing “recently reported holiday sales trends across the gaming industry” as the reason for issuing its preliminary figures earlier than usual, Turtle Beach went on to add “poor performing AAA game launches” to the list of factors affecting its sales.
The company didn’t name specific games, but publishers Activision Blizzard, Electronic Arts and Take-Two Interactive Software saw their shares fall by 3% or more on Thursday. All three had issues with major launches in November. Activision’s “Call of Duty: Vanguard” and “Battlefield 2042” from Electronic Arts—significant releases in the important shooter category—got the lowest critic scores of their respective franchises. Martin Yang of Oppenheimer noted Thursday that the latest update from “Warzone,” the online, free-to-play version of Call of Duty, also “failed to provide meaningful uplift” for the Vanguard game.
Gamers certainly don’t buy a new headset for each new game, but major releases do spark an uplift in sales. Turtle Beach Chief Executive Officer Juergen Stark told an investment conference in 2017 that “Call of Duty” and “Battlefield” are among the games that drive a “3x increase in sell-through” with new releases. He memorably added that the average life of a gaming headset is 18-24 months, not because they lack durability but because “people tend to throw them across the room, they get encrusted with Cheetos or whatever.” Apparently, the latest batch of games failed to inflame players’ passions—or appetites.
Write to Dan Gallagher at dan.gallagher@wsj.com
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Appeared in the January 8, 2022, print edition as ‘A Videogame Slump Comes to a Head.’
