GameStop mobile sales jump 290 percent

Retailer's mobile business booming; digital sales rise 47.3 percent; overall revenue and profits decline for latest quarter.

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GameStop posted overall revenue and profit declines for its first quarter ended May 4, but the retailer's mobile and digital channels saw gains.

The retailer announced today that mobile sales grew 290 percent in the quarter to $46.8 million, while digital receipts jumped 47.3 percent.

That's where the good news for GameStop ended. New software sales decreased 3.8 percent, while new hardware sales fell by an even larger 30.6 percent. Used-game sales fell 7.5 percent.

Year-to-date, GameStop said its US market share for new PlayStation 3 and Xbox 360 software stood at 47.7 percent.

Overall, GameStop posted a net profit of $54.6 million during the period, down from net earnings of $72.5 million last year. Revenue came in at $1.87 billion for the quarter, down from $2.00 billion a year ago. Comparable store sales fell 6.7 percent, and GameStop said this negative trend is due to the "late stage effects of the current console cycle."

"GameStop's continuing margin expansion, growing new businesses and market share gains are the results of executing our strategic plan," GameStop CEO Paul Raines said in a statement. "We look forward to capitalizing on the upcoming new console cycle."

GameStop management will hold a call later today to discuss earnings and answer analyst questions. The retailer's stock value has fallen since it was reported earlier this week that Microsoft's Xbox One may require users to pay a fee to play secondhand titles.

Discussion

30 comments
Elann2008
Elann2008

290% increase over what?  Not impressed lol.    I hope used games end so companies like Gamestop go bankrupt, and gamers who do not support hard-working developers, can't play games because they are too lazy to earn money like everyone else.  

dhagnosis
dhagnosis

what will happen to game rental companies like gamefly? will this new fee or pay wall kill game rentals all together?

csward
csward

Folks, take this with a grain of salt. A 290% increase sounds like a lot, but I'd venture to guess that those numbers weren't very good the first year to begin with. Seems like Gamestop is using this to deflect from an otherwise poor showing.

Also, the mobile phone market is extremely competitive so I wouldn't expect huge percentages for too long, unless they start become a 3rd party retailer like Radioshack, Walmart or Target.

It's good to see they're doing good somewhere though.

realscarygary
realscarygary

I don't get "mobile gaming", what the heck is so awesome about it? The only people I can think of is "non-gamers" that just discovered Angry Birds on their iPad. The entire industri is talking on how they should move into "mobile gaming" and how it is the "next big thing". Maybe it is generation but I sure as hell don't get it, games on a mobile device to me is small cute flash games that are fun the first 10 minutes. "gaming" to me is when you purchase a game, then sit comfortable in your sofa and play the damn thing for the next weeks.

Earl-of-Death
Earl-of-Death

I don't understand why Call of Duty: Ghosts has anything to do with this article? Maybe because it is one of the games Gamespot wants to "capitalize" on.

Earl-of-Death
Earl-of-Death

"GameStop CEO Paul Raines said in a statement. "We look forward to capitalizing on the upcoming new console cycle."

The only thing Gamespot will capitalize on for next gen is selling  new games and consoles. With a lack of backwards compatability next gen they will sell a lot less used games.

atlanticmoon
atlanticmoon

Mobile business...what does that even mean? They sell phone plans now?

2bitSmOkEy
2bitSmOkEy

What exactly do they offer for mobile gaming?  What is booming for them about it exactly..

Dogborn
Dogborn

Gamestop is gonna have to come up with a new business model if they want to succeed in the next cycle of consoles

Timmy_Gwar
Timmy_Gwar

@csward They are a third party retailer. Much like Circuit City, Walmart, or Ridiculous.

Do they not separate the financial reports from their mobile and physical games? 290% sounds fair for mobile games considering the launch of the Galaxy S4 and HTC one. Which allow for easier marketing and downloads of such products from said providers.

Still buggered on the used game sales though, We can probably agree on that.

kouji03
kouji03

@realscarygary it is your opinion, you are not the only person in the world and alot of people like this "mobile gaming" thats why it is getting alot of support hating wont change anything as if calling people that plays on it as non-gamer even though it is a game make you egotistical ass.  i dont play mobile games i just hate how people seem to make it as if there is a big difference between playing on a platform or a mobile. its a game man... just enjoy it and stop whining about what other people want

Earl-of-Death
Earl-of-Death

@2bitSmOkEy 3DS and PS Vita games? Or maybe smartphone and tablet games.

Whitescarver
Whitescarver

@Dogborn They still have a lot of business in the used physical market with Wii U, 3DS, Vita, PS3, Xbox 360, and possibly PS4. Plus they'll still be able to sale new copies of games for the Xbox One and PS4 regardless of their used stance, though not as profitable. 

realscarygary
realscarygary

@kouji03 dude, take a chillpill. I reply is genuinely about not understanding the mobile market so what is all the hostility about, did I hit a soft spot there? Nothing in post uses the term "hate" nor do I even indicate that towards anything or anyone. Now, before you start another round of name calling, go out catch some air, it is good for you.

Dogborn
Dogborn

@Whitescarver @Dogborn Sure, but its only a matter of time before gamers in general forget how awful it is that they can't always buy used games and Sony/Nintendo will pick up on that. They aren't going to want to be the 2 companies that there are  used games for, developers wont like that. 

Lacarus
Lacarus

@Whitescarver @Dogborn They're also looking into reselling digital games... must be something with licenses or the like. 

But the revenue for selling new games (at least in my country) is 10-15%. That's really little compared to the 50-75% from used games.

Elann2008
Elann2008

@Lacarus

You talk out of your ass.  You talk like you know what developers are actually thinking.  Publishers are a business.  If Publishers profit and are happy with their numbers, developers get more work and they get to make more games.  

How are you separating the two, makes no sense.  It's not one without the other mentality, you think it is.  

A lot of developers had to shutter their windows and go out of business, and many faced lay-offs.  

It sounds like you are jealous of those that make a lot of money and are wealthy.  But you really don't have a clue how economics works.  Why would you not want a business to thrive?  

It's this bullcrap socialistic mentality that makes our country stagnate.  Omg..!  That corporation is making lots of money.. they are evil!  Little do you know.. they have created thousands of jobs for many people. It's not like they are throwing dynamites in the river hurting the environment.  

Get over yourself.

Dogborn
Dogborn

@racerxgundam Some games don't generate that much demand off the bat but that doesnt make them bad games or not worth while to play. Demon's Souls is a great example of that. Outta the gates it wasn't a game that many people even knew about yet it spawned a spiritual successor that, arguably, competed very well with Skyrim. 

But thats logic that will end with gaming companies not making shit, it would not be profitable if consistently games/retailers lowered their prices to match gamestops. Gamestop could always be 5 bucks less or what have you and that is enough to have plenty of people pay for that. 


If an album was bad enough for me not to pay full price I probably wouldnt even pay a quarter for it, because its that bad. But alternatively, lets say there is an album you have heard and its fucking amazing, and you have the option to buy it full price or for a quarter what would you do? Probably what people who buy used games do, get the cheaper. 


But people dont only buy crappy used games, they buy good used games and mediocre used games. They dont pay full price because they dont have to, not because they think the full price is too much. They get the same product no matter what, its just cheaper. And if a company can add value to new games, mad props to them, it is just resources they have to spend to try to keep people from buying used games. 


I find it difficult to believe that you could blame a developer for you not wanting a game enough, because gamestop offered their it for cheaper. 

racerxgundam
racerxgundam

@Dogborn @racerxgundam Here again, your trying to "help" a company that didn't create the demand. i will use a SPECIFIC example here

look at the GOW ascension pack. Part of the deal is that if you buy new you get a PSN voucher for the psp games and if you buy second hand you lose out on the deal. A new copy of the game is harder and harder to come by, and used copies aren't selling. Checking for it...on ebay, amazon, and gamestop...you can see for yourself that used copies aren't moving. 

It is not OUR responsibility to do ANYTHING for any gaming company. You have it completely twisted the wrong way around. THEY HAVE TO SELL YOU THEIR PRODUCT. IF THEY FOR WHATEVER THE REASON FAIL IN MAKING YOU PAY THE PRICE THEY ASK FOR...ITS ON THEM!!!!!

So by your logic...say there is a music album that i think completely sucks and in NO WAY worth the asking price at a store. Say i see it in a yard sale for a quarter. And i say to myself...ok they suck..but since its a quarter what the hell. 

its not my fault that they made a crappy album i WOULDN'T HAVE PAID FOR FULL PRICE TO BEGIN WITH.

allopez27
allopez27

Very well said. Agreed. It's very difficult for most individuals to dig deeper into root problens and see "outside of the box" Not everything is black and white and most things have many layers.

Dogborn
Dogborn

@racerxgundam I see it as consumers having two options for what is the same product. One costs more than the other, so logically they choose the cheaper one. It's easy to say you did not create the demand, but if a person buys a used game for 5 bucks less its hard to say the demand wasnt high enough, you bought the game, just slightly cheaper to save on cash. 

I said companies not the industry. The industry has clearly grown substantially and thats undeniable but  there are companies who could have POSSIBLY done better if it werent for used game sales. 


What M$ is doing is very rash and not subtle at all and I agree they have no right to impede that because I do enjoy my physical disc and I dont like the idea of how they are shifting to a software model of essentially licensing games out like its an app. Yet for me, I do think its kosher for developers and publishers to get something for a used game sale. Personally, I have stopped buying used games so I know I can directly support the companies who created it. In my experience with people who buy used games they do so in bulk. Where I may spend 60 to get a single game a friend may spend the same thing and get 3.  Even if most of the money goes to the publisher it at least is my way of communicating to them "hey this developer made a game that I enjoy enough to buy, be sure to publish for them again so they can keep making games" and that is a message I think that can get lost through a company like gamestop. 


I am not saying eliminate used games, there existence doesnt bother me nor do people who buy them. Like I said in my first post, I think within time gamestop will have to change how they function to continue being successful. and yes that is why people are complaining now thats frustrating 

racerxgundam
racerxgundam

@Dogborn @Lacarus @Whitescarver It is not right to call anything the consumer does with his own money irresponsible. If they did not buy new...maybe you overpriced your product, maybe do not create the demand you were hoping. Consumers dictate the value of your goods not the other way around.

your logic is flawed in that the videogame industry has expanded, grown, become more profitable, ALL DURING the highest used sales market which was the ps1-ps2/n64 era. Oh, no one was screaming about the evils then. NOW that publishers want to push AAA titles faster, saturating the market, and expecting the consumer to double dip AKA pay for a game you already have, now in this gross money grab mentality...do the people complain. 

The crux of the problem is that M$ wants to treat physical copies of the game as if it were DIGITAL ONLY content which, in some respects is justifiably using DRM measures. You are getting RAPED by the measures implemented and your rights as a consumer are being infringed on. You buy a physical disc of anything, it is your property to do with it as you please, keep it, break it, shyte on it, trade it in, or give it away. M$ has no right to impede that. Neither do developers, neither do publishers.

racerxgundam
racerxgundam

@Lacarus @Dogborn @Whitescarver Your 100% right but i will throw in this lil monkey wrench...only publishers that have little fan loyalty really fear the used game market, e.g. EA or those that consistently produce crap. 

I would venture to say..by the nature of how they are tied to their fan bases a company like Square Enix or a publisher like atlus would not dare upset Region 4 (japan). All this used market crap is being argued on american shores. Foreign asian publishers know  that putting zero value in any physical disc overseas will NOT fly with that consumer base. 

When you have strong fanbases and release quality games...you in essence curb resale cuz fans cling to their games. Any final fantasy or say mario game is resold at a slower rate than say madden....why? because with lil innovation and few changes to gameplay fans see Madden as less valuable than say any Mario title.

Dogborn
Dogborn

@Lacarus @Whitescarver Which is true, but developers also get bonuses for games that sell a good amount. Sure perhaps not every used copy sold is a new lost, but on that same note you know there are people who only buy used games, which I think is just irresponsible. It's comparable to music, theres the artist, then the record label. If you torrent the music both are going to be unhappy even if it wouldnt have been a guaranteed sale otherwise.


I think at this point we may just have different views on how used games affect the industry. But for me the bottom line is used games, in one form or another, prevent companies from expanding/growing. Who's to say how many times a single used game will be bought and sold. Also smaller companies in general get hurt more by companies like Gamestop because their titles can end up being very cheap very quickly which is partially why there is such a huge gap in games between the AAA and the indie. There really isnt much in between

Lacarus
Lacarus

@Dogborn @Lacarus @Whitescarver It's probably because I hate the way most publishers treat their developers. These publishers don't care about their developers, only the money their games can make. Most of the money that developers aren't getting, are the money that the publishers do get. 

The publishers are paranoid. They believe that every used copy sold, is a potential new copy lost. It's not.  It's a copy (new or old) that might not have been sold under any circumstance. When a customer sees the new price of a game he's intrigued about, he will most likely pass. But the used price may be low enough for him to afford, in which case he might become a fan of the franchise, the developer, the publisher and/or the genre and he'll be more inclined to buy a similar game from new close to release (or better yet, pre-order). And he'll buy the DLC.

Dogborn
Dogborn

@Lacarus @Dogborn @Whitescarver I know the difference and there is no confusion. You just ran through the process of why developers wouldnt like used games, because publishers wont like it and thats enough for developers to be salty about used games because of the implications it can have for them ( as you said, they go bankrupt) . It's money publishers aren't getting so its support that developers aren't getting. Its cyclical.

Lacarus
Lacarus

@Dogborn @Whitescarver Developers don't care about used games. Publishers do. Never confuse the two. Publishers are the money-grupping mongrels, who pushes many develpoers into finishing a game for an unrealistic deadline, resulting in an unfinished game, which doesn't sell, in which case the publishers  blame the developers, refuses to give them more money and the develors go bankrupt.