Helped by strong demand for Microsoft's (NASDAQ:MSFT) new Kinect system, GameStop (NYSE:GME) on Thursday reported improved December sales, but the shares fell.

The Grapevine, Texas-based company posted sales for the nine-week holiday period ended Jan. 1 of $3.02 billion, up 5.4% from $2.86 billion a year ago.

Leading the improvement was a 44.3% increase in new video game software, and following closely were new video game hardware and used video game products, up 22.2% and 20.1%, respectively.

The world’s largest multi-channel video game retailer said the successful debut of Microsoft's Kinect contributed to its results, as did strong demand for Sony (NYSE:SNE) PlayStation 3 and Microsoft Xbox 360 titles.

Tony Bartel, GameStop’s president, said the company reaped the benefits of its investment in    e-commerce, with sales rising more than 100% from the year-earlier period.
Bartel said the online unit’s growth helped GameStop remain “the fastest growing website in the video game space.”

Based on the optimistic results and rising trends, GameStop chose to reiterate its previously announced full-year guidance, with earnings in the range of $2.63 to $2.69 a share.