GameStop Corp said on Thursday holiday season sales failed to improve from the previous year, and cut its fourth quarter profit forecast, blaming a woeful combination of a weak economy, bad weather and product shortages.

The biggest U.S. video game retailer, whose shares sank 16 percent, said sales for the holiday period -- the key season for retailers -- totaled about $2.86 billion, little changed from a year earlier when the U.S. was staggering through the recession.

Previously, GameStop had issued relatively upbeat comments about sales, saying they were off to a strong start. But while new video game software sales increased 4 percent -- thanks to hot titles like Call of Duty: Modern Warfare 2 from Activision -- sales of hardware like game consoles dropped a steep 8 percent.

Given the weaker-than-expected sales, the company cut its profit forecast for the fourth quarter. GameStop expects to post earnings of $1.25 to $1.29 a share, well below analysts average view of $1.57 a share, as reported by Thomson Reuters I/B/E/S.

That forecast is also below its own previous expectation of fourth-quarter earnings per share of $1.47 to $1.65.

(Reporting by Paul Thomasch; Editing by Derek Caney)