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Flat Industry Sales Prompt GameStop Stock Drop

The stock price of major game retail chain GameStop has dropped nearly 9 percent following negative analyst reaction to September's flat game sales, the stock's biggest drop since M
The stock price of major game retail chain GameStop has dropped nearly 9 percent following negative analyst reaction to September's flat game sales. The industry pulled out of its consistent year-over-year sales declines, according to data from tracking firm NPD, but many analysts expected measurable growth. Instead, total sales were up a mere one percent -- essentially flat performance over September 2008. (Sales of software alone, however, rose a slightly-less-stagnant five percent.) In general, analysts took the monthly sales outcome as a sign that the industry's doldrums may be extended, reversing many previous opinions that the second half of 2009 would compensate for earlier troubles. Following the release of the NPD data, financial services firm Janney Montgomery Scott lowered its rating of GameStop stock (NYSE: GME) from "buy" to "hold." The stock then fell 8.9 percent to $25.65, which a Bloomberg report pegs as the stock's biggest drop in five months. Stock prices of major game publishers including Electronic Arts, Activision, THQ, and Take-Two also fell, but not as dramatically as GameStop's.

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