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GameStop Revenue Soars Due To GTAV, But Stock Falls

Ben-Dutka 5 Comments

When a mega blockbuster like Grand Theft Auto V launches, the retailer is bound to benefit.

Thanks to the record-breaking launch of GTAV in September, GameStop's third-quarter report looks mostly rosy .

New software sales rose 43.1 percent to $1.1 billion and new hardware sales increased 15.3 percent to $213 million, thanks to a strong showing by the Nintendo 2DS and 3DS. We won't see sales reports for the PlayStation 4 or Xbox One until next quarter, obviously. But while software and hardware climbed, other categories fell:

Overall pre-owned sales fell 2 percent to $486.6 million (down from $496.3 million last year), and its mobile business saw sales fall from $321.9 million to $305.2 million. Still, all told, global revenue was up 18.8 percent year-over year ($2.11 billion), and the retailer posted a profit of $68.6 million for the quarter, well up from the net of $47.2 million in 2012.

Said GameStop CEO Paul Raines:

Our strong third quarter sales results give us great momentum as we enter the new console cycle. Consumer appetite for the new consoles is very strong judging by last week’s successful PS4 launch and the excitement for tonight’s Xbox One launch event. Globally, we are executing our unique playbook to maximize our position of strength."

And yet, all this didn't help their stock . Shares have fallen off significantly, down nearly 10% to $47.33. This could be due to the retailer's predictions for the holiday quarter, which aren't quite as high as anticipated.

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GameStop Sales Down, But Things Are Going As Planned

Ben-Dutka 6 Comments

GameStop sales fell over the past quarter but despite that, the company says things are "playing out as expected."

The retailer's earnings report for the second quarter ending August 3 reveals an overall global sales decline . Total sales fell 10.7 percent, down from $1.55 billion to $1.38 billion, and comparable store sales also fell 10.7 percent, which is actually slightly above the company's projections. They obviously anticipated this dip.

Perhaps unsurprisingly, GameStop's mobile and digital businesses were on the rise, leaping 121.4 percent to $55.4 million and 17.9 percent to $158 million respectively. New software sales were down 9.3 percent while hardware sales dove 19.4 percent. Well, sure what with the new consoles on the horizon, few gamers are picking up consoles right now. As for pre-owned sales, those fell 6 percent. The company reported a profit of $10.5 million for the quarter, which is well down from the $21 million last year. But this is expected, as GameStop CEO Paul Raines said in a statement:

"Through two quarters, the year has played out as expected. During this console transition period, our financial results have been supported by the continued growth of our emerging businesses. This strength helped drive a 130 basis point improvement in gross margin rate for the second quarter.

Of course, excitement continues to build for the upcoming new games and the launch of the PS4 and Xbox One. As the global gaming leader, GameStop is uniquely positioned to capitalize on the new, innovative products coming to market."

Due to the upcoming new generation, GameStop has raised their earnings projections for the full year. The PlayStation 4 and Xbox One launch in November in North America…and it will be pandemonium.

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GameStop In-Store DLC Sales Hit 10 Million…Yeah, That’s Right

John-Shepard 19 Comments

Did you know that GameStop sells in-store downloadable content? No? Well, it turns out a lot of people do .

At first glance, it might seem a little silly. But add-on purchases at the global video game retail leader have just hit 10 million, and GameStop claims the key to this success is the person-to-person interaction. Obviously, we don't get that when checking out DLC on the PlayStation Network or Xbox Live.

Director of digital content Brad Schliesser told GameSpot that thus far, the business endeavor has been a "great success."

"We had an opportunity over the last two years to prove to first-party that we can play a meaningful role in the distribution of digital content. In 2010, we started with 35 stores and five sellable DLC SKUs in a [pilot program] with Microsoft. Since then, we've added 4,500 stores and 1,800 products available for sale just on the console side. And we've sold over 10 million units of DLC in that time period. I think we've proven that retail still provides a very meaningful role, even in the digital content space."

And really, a lot of this is due to the employees as far as Schliesser is concerned. In fact, he said the in-store associate is "more impactful than any marketing campaign that we could probably ever do for digital content." It represents a "key divider" and has helped a great deal, apparently. So have you bought add-on content at a GameStop recently? Do you ever plan to at any point in the future?

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GameStop Enjoys 5% Holiday Rise To Over $3 Billion

Ben-Dutka 16 Comments

Well, GameStop certainly had a happy holiday.

The retailer has announced their numbers for the nine-week period that ended on December 31, and they saw a 5% year-over-year increase; $3.02 billion up from $2.86 billion.

New software sales spiked, rising 9.9% above the 2010 take. Hot titles like Call of Duty: Modern Warfare 3 , The Elder Scrolls V: Skyrim , and Assassin's Creed: Revelations led the charge, although GameStop CEO Paul Raines dubbed software sales for the Wii as "weak." Used game sales were up, too, rising 3.5% and up 7% year-to-date.

On the downside, hardware sales fell 19.6%, although it probably isn't surprising due to no new hardware. And GameStop added that the price points still aren't low enough to "stimulate consumer demand" so in other words, most people who wanted a gaming console already had one heading into the holiday season. And by the way, the biggest growth for the period came in the retailer's digital sales department, which rose a whopping 60%. …Call of Duty Elite subscriptions had a lot to do with that.

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GameStop Registers Fiscal Revenue Records For 2010

Ben-Dutka 74 Comments

Although digital distribution gets bigger with every passing day, the brick-and-mortar GameStop stores continue to thrive.

The world's leading video game retailer has revealed record revenues for both the fourth quarter and full-year earnings. For the last three months of the fiscal year, GameStop posted sales of $3.69 billion, which is up 4.8% in a year-over-year comparison. Profits were up, too, as the net earnings for the holiday period hit $237.8 million, marking a 10% 4Q year-over-year increase. For the full year, the retailer recorded its biggest campaign to date: total sales reached $9.47 billion, a 4.3% increase over the $9.08 billion posted in 2009. And speaking of digital content, GameStop was able to get a piece of that market, selling $290 million worth of DLC. That's up 61% from 2009 and lastly, in terms of annual net earnings, the company registered their highest-ever total: $408 million. Expectations for fiscal 2011 are even higher and they expect to open 200 new stores in the US as well. How is the industry faring? Well, not too bad from this standpoint.

It'll be interesting to see how GameStop moves forward with the digital content boom. They seem to be adapting just fine so far.

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