GameStop earnings soar sevenfold

Three-month net profits jump 686 percent as company finishes a record six months.

While individual publishers succeed or fail in a growing game market, retailers benefit regardless of which titles turn out to be the biggest sellers. GameStop has been benefiting quite a bit lately, as the company today posted its second-quarter financial results, with net earnings nearly seven times what they were for the same stretch of time last year.

For the 13 weeks ended August 4, GameStop reported net earnings of $21.8 million, up 686 percent from the nearly $3.2 million the company posted in its second fiscal quarter last year. Revenues were also up, as the company reported more than $1.3 billion in sales for the quarter, compared to the $963 million it managed in the previous second quarter.

During a conference call with investors, GameStop executives called it the best-ever second-quarter performance in the company's history, capping off a record first half of the year. New hardware was a recurring theme on the call, with the executives noting that PlayStation 3 sales have doubled since the 60GB system received a price cut with no sign of slowing down, and that the Wii is expected to remain in bafflingly short supply until 2008.

"We have been getting a [Wii] shipment every week," said vice chairman and COO Dan DeMatteo. "And every week we ship the products to the stores, and I expect it to slow down. And it never does. I just don't know where the demand is."

While any retailer that sells games stands to benefit from a booming industry, GameStop CEO Dick Fontaine said that the company is exceeding the competition. For the year-to-date, GameStop has accounted for a larger slice of the retail market in every country in which it does business. Citing data from the industry-tracking NPD Group, Fontaine said that GameStop's US market share has now grown to 23 percent.

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113 comments
darkscorcher
darkscorcher

thats because gamestop is the CHEAPEST STORE to buy games(i dont trust EBAY, because you dont get to see the game until it is shows up at your house,and THE ONLY MAJOR RETAILER(has hundreds of stores) that BUYS BACK used games. AND TO ALL THE PEOPLE WHO HATE GAMESTOP , if you hate the low prices so much, BUY ELSEWHERE, if you dont like how much they pay per hour, get an EDUCATION, and work at a high executive posistion, or SOMEWHERE ELSE. and if you dont like the trade in values, get off your LAZY BUTT, and sell the game yourself on ebay or craigslist or to a friend, so you can get more money for it . game stop is giving a fair deal, they give you a quick offer for a game, and they take the time, to sell it, an make some money off of it. gamestop, sells games cheaper than anywhere else where i live, they have the cheapest price for used games, which they will let you exchange if it doesn't work ,(or if you say it didn't work). gamestop, is just awesome for the consumers, thats why the majority of people who shop their, ONLY SHOP for video games at gamestop like me, i get 10% of all games, which is better than 0% that any other retailer offers. sorry if I sound rude, but some of guys , have no concept of SIMPLE ECONOMICS, i got a gameinformer subscription for only 5 bucks, and an edge card, just because i got two used games,

GonzoGuy
GonzoGuy

And incidentally, thanks Game... for showing us how insufferably arrogant your company line is. You act like gamers would be completely lost without GS/EB. Like we can't get used games or pre-orders anywhere else. That isn't the case... yet; and I'm trying to prevent that from ever being the case by using amazon, ebay, as well as the smaller local shops for used games, using the large retailers for the rare pre-order, and trying to convince others to do the same. All the Gamestops & EBs could disappear overnight (I know, too good to be true) and gamers would still get their games, they'd get better deals too.

GonzoGuy
GonzoGuy

I notice there don't seem to be any competent responses to my post so I'll reply to the other one. @...#&*$ Gaym.... Not that you replied to any of my actual points but, Don't worry, I wouldn't be caught dead in a GS/EB. I rarely pre-order but never at GS. I usually buy used, but from amazon or ebay and it's usually 1/4 of what GS charges. I'm here just trying to prevent other gamers from being exploited by GS/EB. I have a hard time believing that GS/EB has anything but contempt for gamers. Don't you realize that as long as gamers are convinced that GS/EB isn't riping them off, other corporations, politicians, and other assorted d-bags are going to think gamers are weak minded and there to be preyed upon. What really seems pathetic to me is the fact that the only people really defending GS here are the employees, and from what I understand, they're treated terribly. Not too surprising; the 3 times I've been in the place, most of the fruitcakes that worked there seemed like they were on whatever drugs lobotomized Anna-Nicole. I just hope that other gamers can soon become savvy consumers. When that happens, I guarantee that we'll be taken more seriously.

Autolycus
Autolycus

The_Game_517 The_Game_517 ----- Gamestop is HURTING the game industry, NOT HELPING. PAY YOUR EMPLOYEES. PAY TEH DEVELOPERS. STOP HIRING WORTHLESS DM, RM, ETC AND FOR THE LOVE OF GOD, GET A BETTER LOSS PREVENTION. I've called in multiple times for my store manager stealing AND my DM...but guess what happened. NOTHIng. Because executives in that company are like cops. They lie for eachother to get away with murder....

Autolycus
Autolycus

as an employee of 9+ years, you will hard pressed to find a company that cares less about the customers and employee's then gamestop. but they know there is alway some dumb schmuck willing to work for pennies and some manager willing to use 80/hr week to average out to 5 dollars an hour, annually. They pay low 30's as store managers... btw, teh customer is always wrong.

smzee27
smzee27

The main problems I have with GameStop are when they give very little store credit for trade-in games, or repeatedly badger you about pre-ordering games, or register for blah-blah. But at the same time, it's a bigger incentive for me to keep my games as I may want to play them again someday, or just to add them to my collection. And besides, it doesn't take any effort to just say "no." It's understandable, it's a store, it's a business, there's no reason to get angry at them. So stop flaming it, no one's forcing you to go there. If you want better values, sell your stuff on Amazon or something.

The_Game_517
The_Game_517

@ hunter8man - we pay whatthe game is worth to the market. Not you. Imagine buying a car and wanting to trade it in in 4 months. How much would you get? 50-60% of the value? @soupNatsi - it's easy to say that we don't stock new games and that we have more used, because it is true. Our new selection is only for current games IN PRINT. Our used games are from 5+ years ago. See? And as far as the price being better at BB? We are VERY competitive with other retailers. When there is a price drop FROM THE MANUFACTURER we drop it (usually) the same day as BB, WM and others. We have more used product sometimes. Want a new sealed copy of Gears? If we don't have it go to BB. I would. @GonzoGuy - I hope I never have to wait on you. Don't want to trade? Don't. Don't want to pre-order? Don't. Don't want to buy used? Don't. Just DON'T complain when that new $59.99 game is too much this week and you can't afford it. Or better yet DON'T complain when you have to get up early to get a copy of *insert new release title here* or you won't get one. DON'T complain when the only copy we have is used. You do realize that as soon as you open that new game, more often then not, it becomes that used copy you didn't want to spend less on. @ themarsone and e-racer22. kudos guys. I assume you work for GS and you seem like very smart knowledgable guys who probly do well in your stores. Listen guys. All we want is to operate as a business. I know gamers are picky people and for the most part we get that. We try to help. Just ask us and we will do what we can. We will always do what is best for YOU. Get to know us as people and not as an evil corporation, we will all get along much better. I promise.

Autolycus
Autolycus

gamestop isnt to blame(and i hate them) the people that actually trade in, because they cant balance their budget are the people to blame.

hunter8man
hunter8man

So glad to hear it! Now can you please stop screwing customers over on their trade-ins? I'm tired of getting barely what the game is worth towards another game. I really wish another game retailer would come onto the scene to give them some competition.

SoupNatsi
SoupNatsi

Isnt it nice to see that gamestop is screwing more people? The replies from the managers here remind me of the same commitment to quality as a fast food manager, who gives a **** if the customer is happy as long as there are ways to cut corners and save the store money. I think the only reason they are making record profits is because they are getting more aggressive with forcing people to buy used games. I remember FF12 was only on the shelf new for about 5 months, then the only way you could buy it there was used for $44.99. The last time I was in a gamestop I saw how pathetic their selection of new games was, new games only took up about 10% of the shelf space (you couldnt even buy Gears of War new and this was last spring). And what happens to the games at Gamestop when Best Buy and the other real retailers lower the price of new games? Nothing. I could either buy FF12 for $30 new at the real retailers, or I could take my happy ass to gamestop and pay $45 for a used game that most likely wont work since gamestop could care less about quality control. Gamestop doesnt have to acknowledge official price drops if they dont sell new games. What a fantastic company. Too bad their record profits will never reach the game companies or consumers.

n2Deepeth
n2Deepeth

WTF? If things keep up like this when the extraordinary games come out, I think the executives are going to get heart attacks. I like Gamestop since their trade-in values are decent, their service is good, and they have some really good specials, like 10% your next purchase coupon this month + the EDGE card. At least the Gamestop near my house is like this.

GonzoGuy
GonzoGuy

Wow I see allot of BS floating around here. It looks like GS/EB's profit isn't going into better PR. I understand that in a capitalist society corporations need profit, but usually when a company does that well, they try and show their appreciation for the consumers who got them there. They can't even make worthless token compensation. Like Exxon/Mobile, all GS/EB seems to want to do is figure out bigger and worse ways to rip off the customers they should be thanking. Like this new increase in pre-order price: http://www.joystiq.com/2007/08/27/rumor-gamestop-increasing-pre-order-to-10-changing-image/ This particular corporation, like the politicians, is one of the groups that makes gamers look like fools.

drim_vells
drim_vells

I couldn't agree with you more themarsone. The only times I have witnessed at customer at my EB Games(we haven't had our name change yet) are when they are complete douchebags to employees. To everyone else listen to what he says. It's all true. And do not be pissed when you don't get as much money as you payed for a game 3 years ago..or even yesterday. It's a business. We couldn't survive if we just gave you full refunds once you beat the game.

themarsone
themarsone

GameStop is not the great evil of video game retailers... if we are, it's because of customers who habe made us this way. However, let me teach you some of the loopholes with store policies to make this less... horrible for those who are a little irked. If you are buying the last copy of a new game, you will get the opened display box. If you ask for a discount, since it's not technically new, you can ask for a discount. (We call it "Open/Shopworn".) Bam, instant 10% off in most store. However, this doesn't work on used games, as they are sold as-is. On used games, you have 7 days to return the game if you don't like it, so that you can try again. Don't take too much advantage of this though, as store clerks will start to recognize you, and we are not Blockbuster. OMG power trades. Reserve a game, make a few dollars extra. It's not hard. On trades, you will get about 1/3 of the game's in-store selling price. Sports titles get less. New games get closer to half. If you buy a new game and it is horrible, trade it quick, because the value will drop faster. And finally, if you can build a good acquaintance with the employees at a store, we will always be more willing to bend rules in order to help you out. We're poor humans and college kids too, and we tend to be pretty sympathetic and keen to help customers that we like, regardless of how much they spend. However, it goes both ways, as we can make your shopping experience miserable if you make us miserable over time. LOL GameStop policies. We're not evil, promise.

Eclipse_ShinRa
Eclipse_ShinRa

Ebgames used to have great deals before Gamespot got a hold of them same for Rhinos.

atlessky
atlessky

Gamestop is getting rich profits,but I never served at there before

jimbo6923
jimbo6923

Not hard to do when you're a f*ckin' monopoly, is it?

walrus1
walrus1

I really wish they would stop reading the descriptors on the back of the box to me. As a 19 year old college student i can read thank you very much.

gatsbythepig
gatsbythepig

That's what happens when you rape your customers for money.

SlikNik27
SlikNik27

I hate Gamestop. They feed on the uneducated video game masses who are too stupid to use ebay and enjoy getting $1 per game on trade ins. Looking for a complete version of a game (or sometimes just a working version of the game)? Look elsewhere.

dyne2198
dyne2198

kappareign never, ever, EVER trade in or sell a used console or game to gamestop. that is how they make their profits. they give you next to nothing for your merch, then turn around and sell it in their store for 10 times as much. i dont like the way gamestop does business and no one should support them by being ripped off like that -------------------------------------- Bro...do me a favor. If you currently hold a job....the next time you get a paycheck....I want you to hold it up....and rip it to shreds. Don't cash it, just rip it to shreds because that's what you're asking their employees to do. That comment by you makes perfect sense. Why in the sam h3ll would anyone that works for Gamestop want to make a profit?! Scr3w paying the bills folks, we've got haters having tirades! The h3ll with opening more stores, we're not allowed to take profit to the bottom line! C'mon bro, are you serious? God help us all if your a business major when you hit college. I wouldn't buy 5 year old sports titles for more than a shiny new quarter, and neither would Gamestop. Profit is not a dirty word, my friends....get used to it. Their people don't work for free, and I wouldn't expect any of you posting here to do that either.

e-racer22
e-racer22

In regards to trade-ins, you also need to realize that they may never recoup the price for which they bought it back. I was thinking about this the other day. I'm sure they move these quickly enough so that it isn't an issue, but, GameStop does assume all the risk when they buy a used game. Will it really work, will it every actually sell. Noboby forces you to sell your game back to GameStop. In fact, the reality is that it probably hurts the industry more than helps it. The people that made they game only make one sale. The people that retail the game, get to sell it over and over. Don't get me wrong, I like buying your used games. So, please, keep trading 'em in. I have no problem with the fact that you can't appreciate a good value.

Vihlo
Vihlo

never, ever, EVER trade in or sell a used console or game to gamestop. that is how they make their profits. they give you next to nothing for your merch, then turn around and sell it in their store for 10 times as much. i dont like the way gamestop does business and no one should support them by being ripped off like that Sorry that your NHL 01 only trades in for a dollar, or your old useless xbox games aren't worth anything. I generally don't see a big problem with their trades, since I buy and trade often, my last trade was Ninja Gaiden for the PS3 and it got me 45 credit still.

speakenglish
speakenglish

Hmmm. $21.8 million divided by the 4954 stores currently in operation... $4400 profit per store average... that's hardly enough to cover managerial bonuses in most industries, let alone wage increases... Their overhead sucks.

kappareign
kappareign

never, ever, EVER trade in or sell a used console or game to gamestop. that is how they make their profits. they give you next to nothing for your merch, then turn around and sell it in their store for 10 times as much. i dont like the way gamestop does business and no one should support them by being ripped off like that

e-racer22
e-racer22

The_Game_517, I appreciate the insight you provide as well as your clear, concise responses. I agree that used, is used. But, in my opinion, I do think there is some merit to the idea that re-shrink wrapping a display model and calling it new isn't exactly legit. Yes, the game hasn't been touched, but, the manual's been rifled through. I didn't realize that the profit margin on new games was so slim. But, for the most part it appears they are making it up on the trade-ins. Whoops, my folklore demo just finished downloading ... I'm outta here! :-)

The_Game_517
The_Game_517

Quote: munsoned i hate gamestop, why? well i bought a ds lite for my gf. i let her try it out and she didnt like it.a few hours later i take it back to gamestop.i boxed it up perfect if they took it out of the box they would never known it was used.but that little sticker was messed up on the box. and the clerk told me all we can do is give u 30 bucks store credit.i smiled and walked out... So you bought something new and used it. Then you tried to return it like it was not used? I think that is Fraud. No? And what if you were the next person to buy it? You expected GS to take back a used DS and what? re-Sell it as new? Used is used my friend. A little or alot it is still used. What do you think BB or WM would have said? At least GS gave you a choice and didn't just laugh at you like other retailers would have. Oh, and a DS Lite gets $70 trade in credit. $56 in cash.

chibi-acer
chibi-acer

Good, maybe now GameStop will stop being such a big used games whore. I mean, store. :)

123625
123625

munsoned i can agree with that stores rip you off something wicked.

subrosian
subrosian

It's a simple business model, and it works - "buy low, sell high". All of the business practices people give EB / GS grief for are the same ones *every* retail store uses... EBGames does a solid job of getting perks for gamers, even as someone who buys all new games, it has always made sense for me to shop there. There are fellow gamers behind the registers, the pre-order bonuses on some games are fantastic, and as someone who is tight on money, I do feel like they appreciate the business. That, and all dedicated gaming stores simply do a better job of the customer service aspect. It's the same $50 product at Best Buy as at EBgames, why should I put up with crowds, noise, a huge maze-like store, long lines to check out, and rude employees at BB when I can say "hey man, I want to preorder Bioshock" at EB and have a clerk who is just as excited for the game as I am? For those of you fortunate enough to live near an independent gaming retailer - keep supporting them - but everyone else? Honestly, if you ever buy a videogame at Walmart, you are no longer a gamer.

munsoned
munsoned

i hate gamestop, why? well i bought a ds lite for my gf. i let her try it out and she didnt like it.a few hours later i take it back to gamestop.i boxed it up perfect if they took it out of the box they would never known it was used.but that little sticker was messed up on the box. and the clerk told me all we can do is give u 30 bucks store credit.i smiled and walked out...

GonzoGuy
GonzoGuy

And Thank You Dr Gonzo for bringing up the fact that EB/GS has been making huge profits like this for years now. And while most corporations will show their appreciation to their consumers in some way, GS/EB (once again like Exxon/Mobile) just look for bigger and better ways to rip off gamers. They (like the politicians) are going to have to realize someday that not all gamers are naive children that they can just plunder. I guess I just didn't realize how much GS/EB was abusing everybody, but it must be REALLY bad for a retail chain to make THAT much profit.

GonzoGuy
GonzoGuy

Not surprising at all. A company that rips off it's customers and shafts it's employees making record profits? Why should we be surprised? The board-members must've gone to the Exxon/Mobile School of Exploitation. And they're just going to keep getting richer as long as they prey on the fools who are willing to pay new prices for used games. Seriously, the gamestop by me skims maybe a dollar or two off the new price, which in most cases doesn't even cover the tax.

prioritymail
prioritymail

Gamestop is robbing us all. Those prices are outrageous, but they make money because they have the convenience of having everything game-related in one place...

pridex
pridex

@ The_Game_517 your point is easy to understand but a 700% increase in revenues? I did some Googling and your numbers are relatively correct But Im positive that they buy in bulk and usually thats cheaper than someone buying a few. Then you have advertising that Publishers pay for like front end placement, counter placement, shelve placement, pretty much anywhere in the store is placement. Every poster or display they get paid to put up. Im sure your aware of this. 15 dollars for shipping a console is incorrect maybe half that a console if that or they need to find a new package handler cause that's a ridicules number. I believe a lot of GS/EB growth was due to advertising not actual selling of products. After this year there numbers will drop. Maybe your aware of this but gamecrazy pays more for used games and cost less to buy used games. Even with your card its about 5 dollars less to purchase a product from Gamecrazy without there card. Gamespot/EB is a monopoly that doesnt really benefit the consumer.

latin3030
latin3030

@DMASTOR Im still trying to read thru your run-on sentence, (I dont know what your trying to say???). Did you ever take english class?? good post THE_GAME_517

Leick3
Leick3

its a great store, they do a good job with keeping things in stock, at least in minnesota

dmastor
dmastor

@ The_Game_517 lol I see you work there and proud do they even pay you enough to buy stocks in the company. and your wrong reserves the head bosses love because it but money in the account and grow intrest it don't matter about the demand that's why halo madden and other game may be sold out there but not a best buy.

dmastor
dmastor

I think it's funny anyone thinks that it anythink gamespot is doing the fact is systems and games cost more and are bigger then ever. Gamestop sucks and pay there workers minimal pay lol

abw1977
abw1977

The_Game_517, I just wanted to say thanks for the very interesting post. I know that Gamestop's big business has, and always will be, used games but it was interesting to see how much profit a new copy brought it. I have no real proof of it but I think the 59.99 asking point for most next gen titles has been the biggest contributing factor to their record profit.

The_Game_517
The_Game_517

I know you guys probably aren't into the business aspect of Gamestop and all but let me break it down for you. The new games we sell for 59.99, we buy for about $50-$52. Those are the prices from the publishers like EA, Activision, etc... The 360 we sell for $349.99 we buy for $330, after shipping we make about $5 per console. Now the used games. We buy games based off supply and demand. YOU are the ones that determine trade and used prices. If it is traded in alot we lower the trade value and eventually the retail. We buy gears of war for $25 and flip it for $55. Minus $5 for the edge card and you pay $49.49. Now how many copies of Gears does your local store have in stock? Mine has 15 the last time I checked. I can guarantee a price drop soon and the profit margin will drop as well. Gert it? The $22 million in profit is amazing considering that we only make a few bucks on games and consoles. We have to spend alot on overnight shipping so we can get the games in first thing on release day. Go and ship one game overnight and tell me how much it costs. Now imagine shipping 50+. Finally, reserves. Reserve it or don't. I don't care. I am a Store Manager and don't care if you do or don't. If you want it day one and want to take your chances then fine. If you want to make sure it is here, reserve it. Reserves tell our company how much to buy. Do you ever buy anyting in bulk without thinking how much you will need? Not smart is it. If we do not have an idea of how much to buy we either buy too much (loss of margin) or too little (loss of customer). There is no point to sit on 100,000 copies of Overlord when there wereno reserves and only got mediocre reviews. We order what people ask for. Bioshock is a good example. No one wanted to reserve and the it blew up and we were left hanging. As well as 2K. They didn't MAKE enough and now we are waiting for them to restock US. Oh, and PC games only make up 3% of GS business so they only get 3% of the space. Everyone here that has DL a game illegally is responsible for that. NOT Gamestop.

Humidity
Humidity

To address a few points: 1) new opened games - new games are sometimes opened just to have a display copy to put on the shelves. The plastic wrapper is removed and it goes straight into a paper sleeve. It may have been opened but it was only touched once by human hands. And, at least at the store I work at, we take great care not to fingerprint/smudge the bottom of the disc. 2) Pre-orders are not such a bad deal. Even if you don't pick up the game, you never lose your money. Although, I agree being badgered constantly to pre-order every time you are in the store is annoying. We know that, but minimum wage employees just have to do what corporate instructs. 3) One thing I would really like to see is GameStop employees (Manager to part-timer) being able to purchase GameStop stock via payroll; at present only Managers who have been with the company a set number of years have that option; at least that's what I've heard. and 4) regarding the stores looking like a "bomb hit". Customers have no one to blame but themselves if that is the case. At least at my store we make every effort to keep things organized. It not only helps customers find what they are looking for but when you come to the counter and ask for a game we have to go find the case on the floor. Organization helps us too. Unfortunately, we have a large number of customers who don't care about or were never taught to put things back where they found them. And don't even get me started about little kids or drop-offs just being let loose in the store by "parents" to wreck the place while mom and dad shop, or worse, go shop at another store. Sorry if I'm ranting but at least two of those issues come up in our store on a more or less daily basis and it just gets annoying.

feryl06
feryl06

this is funny for those threads you read about people not going to EB/GS any longer cause they're biased. Yea, I don't think EB/GS cares about those guys. :)

ynfive
ynfive

I agree with other commenters on giving the clerks a raise. I don't work at a gamestop, but I get all my games from one because of location. It'd be nice to see gamestops become a little more attractive and better console kiosks and displays that I can spend time gettting to know the games better. It'd be nice to see a Gamestop I feel I could "hang out" in for fifteen minutes or so instead of the two minute chat with the clerk while he rings up my game.

JamesL007
JamesL007

I agree with the fellow commenters on this one it is good news but they need to step it up a bit. First a raise for there employees, second better money back for returned games, those first than I may go to Gamestop. For now I go to GameCrazy its closer to me and they give me a better return for used games than Gamestop does. Peace

snakenamedjoe
snakenamedjoe

It makes me sad to see them doing so well. They vandalize the game industry and make huge profits. >(

Pete5506
Pete5506

I never used gamestop, I look but never buy, the only game I ever got at one is Dreamfall just cuz it was 20 and every where else it was 50

Astral_Vapor
Astral_Vapor

This is great and all, but they need to give their employees a damn raise, and show that they do care about them. I dont work there, but those dudes make rocks, not money.