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GameStop Reports Record Q1 Results

Tom Ivan's picture

By Tom Ivan

May 21, 2009

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GameStop has reported record sales and earnings for the first quarter ended May 2, 2009.

First quarter net earnings rose 13.4 percent to $70.4 million (£44.9m), while sales increased 9.2 percent to $1.98 billion (£1.26b).

The company said that sales were led by the “very successful launch” of Nintendo’s DSi and the “strong releases” of Capcom’s Resident Evil 5 and Street Fighter IV, although it noted that the two games were unable to compete with “the tremendous success” of Grand Theft Auto IV and Super Smash Bros. Brawl early last year.

The company said that the recession in Europe and a slowdown of new console sales was to blame for a 1.5 percent decline in first quarter comparable store sales.

GameStop CEO Daniel DeMatteo also noted that sales of used games grew 31.9 percent during the quarter, “illustrating that value is becoming more important to our customers.” In contrast, new game sales fell by 2.8 percent.

“We continue to profitably manage our business through the global recession by effectively managing our buy-sell-trade model and maintaining tight expense control. In fact, we were able to retire $50 million of senior notes and end the quarter with cash of $230 million,” added DeMatteo.

“I am also pleased that we were able to capitalise on the downward pressure of rents, and open 114 new stores. As in the past, we continue to improve operating margins, build brand and value awareness with consumers, and gain market share as we expand the videogame market worldwide.”

dreamhunk's picture
On May 21st dreamhunk said:

here is a really good quto I found from a poster

http://www.gamerswithjobs.com/node/45139

"

If Gamestop / EBGames could've killed the pc off, they would have. They were quite shrill in proclaiming its demise.

In the US at least, I think they played a big role in the dip pc software sales took both in perception and at the register. There were less options at the time for acquiring pc software, and if digital / e-options existed maybe the awareness/comfort factor just wasnt there yet for consumers. Brick-n-mortar was still king.

Sure, they said pc software sales are marginal, but they had a vested interest in doing so. Remember witnessing 'the shrinking'? Their pc sections retreated to smaller and smaller, low trafficked areas in the shop, while they put their weight behind the easy money, consoles and particularly used console software sales.

It seems to me that once you begin throttling a major channel to the consumer, you are taking an active role in the determining the outcome. I don't blame them, but I just feel they helped orchestrate a portion of 'the fall' of pc gaming because it suited their business model. Look how easy it is to process a used console game purchase, inventory management and sale. Then remember back to the chaos that was their used pc game sections. Turnover was probably low, the inventory was usually a mess, they probably ate losses constantly between quick downturns in product 'value', operating costs to process and inventory the used pc games, dealing with the return fun that mustve gone hand-in-hand with used 'cd keys' and outright theft. In contrast, look at the efficiency of trading in a used console game. By the time you hand it over the counter, they have a sleeve out, a sticker printed, and the box is ready to go on the shelf before you leave the store.

A lot of my own gaming has transitioned over to consoles, but I'm glad to see the market presence of the pc being recognized again. Did it really shrink overall or was that perception just an business agenda for big players in the industry... I tend to think it's the latter."

I agree with this right here

dreamhunk's picture
On May 21st dreamhunk said:

while console games game devs lose their money to the used game market, plus on top of that their games pirated and rented . Pc game devs are making a ton of money of pc games. Why would you ask well pc games don't get rented. Then there is the fact DD is pure profit for game devs. NO micro soft or sony to lose their money too. No travel expsenses to be paid for. No packaging to be paid for ever with DD. NO worring about shelf space on DD.

know wonder pc game devs are booming in this ression. Oh one more thing you can include wii games to above. I would like to add the wii by the has a much bigger pircay rate than pc gaming does.

http://www.tgdaily.com/content/view/36072/98/

this is old news too I am sure the pircay rates on the wii is much higher today.

I want to see any pubisher or game dev prove me wrong here! lol