GameStop posts biggest non-holiday quarter ever

Specialty retailer breaks $2 billion sales mark on strength of stacked March slate including Bad Company 2, Final Fantasy XIII, God of War III; net profits top $75 million.

Global economic malaise be damned, GameStop continues to enjoy financial success in a difficult consumer climate. The gaming specialty retailer today released record-breaking results its first fiscal quarter.

The faces on these customers are almost as silly as GameStop's record sales.

For the three months ended May 1, GameStop posted revenues of $2.08 billion, up more than 5 percent from the $1.98 billion it managed in the same period the year before. It is the first time GameStop has ever broken the $2 billion sales mark outside of the company's holiday quarter.

The company's performance could be largely attributed to spiking new game sales, which were up more than 13 percent year-over-year on a lineup of big-name releases in March. GameStop singled out Battlefield: Bad Company 2, Final Fantasy XIII, God of War III, Pokemon HeartGold and SoulSilver, and February's BioShock 2 as particularly strong sellers.

GameStop also improved its bottom line for the quarter. The company posted a net income of $75.17 million, up nearly 7 percent from the $70.43 million profits it declared in the same stretch of the year prior.

While disappointing sales for April have analysts second guessing their previously optimistic predictions for the industry in 2010, GameStop's outlook remains rosy. The company expects net profits to be up 9 to 17 percent year-over-year in the current quarter, 19 to 28 percent in the next quarter, and 14 to 18 percent overall for its fiscal 2010.

Those figures may be bolstered by some of the company's latest initiatives. GameStop said that later this month it will begin marketing and selling downloadable content in a number of test stores, and certain markets will see the launch of a new customer loyalty program.

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163 comments
BarricadeS281E
BarricadeS281E

Funny thing is I was all excited for FF XIII and all and pre-ordered it. Picked it up on the release date AND even bought that Limited Edition strategy guide 'cause of the discount. And to this day, I have yet to touch the game. I've opened it up, but totally lost all interest in attempting to play it. Guess I just waited WAY to friggin' long for it and didn't care anymore. Played the GoW III Ultimate Edition I pre-ordered instead - whoopee!! Much of my wallet contents has hopped on over to GameStop's wallet this past year, and I'm happy. Congrats to them! Now I'm hearing cases about FF XIII bricking up people's PS3s all over and that gives me even more reason not to play it.

zinoalex
zinoalex

Congrats for them but all gaming retailers had a lot of quality titles to sell this past winter and into spring. From Final Fantast XIII to Bioshock 2, to STrange Journey for the DS.Even a Sakure Wars box set for the legendary PS2.Developers and Publishers will be more inclined to make a better product when they see what happens when quality titles are done and released. Let us all hope for the best!

KrazzyDJ
KrazzyDJ

If Digital Distribution becomes popular (which I doubt it will given the number of people who prefer Hard Copies), video game stores might be in serious trouble in the future. Are they already making hay while the sun is shining ??? Considering that Gamestop's managers are working 6 days a week, I guess they might just be !!!

JuanJo_H
JuanJo_H

Well done... but somebody knows why they didn't have a stock of PS3 slim online, most of their first quarter was out of stock, maybe they would have made more money with that.

smbius
smbius

@PenguinIzzy - Solid points but here's some thought. You are right that Gamestop is not the only place for second-hand games but Gamestop provides the worst value and is the most notorious in game flipping. Developers are not ganked by the used-game market. They are ganked by Gamestop considering that they are the biggest game retailer. They make very little money from the new games but make the most from the used games. Ask any Gamestop manager. This is why I have an issue with Gamestop's used games in particular and not all avenues of buying used games. This is especially true for game collectors. It's hard to generalize the used game market because not all used games are created equal. Ebay and Amazon's used games are mostly sold by individual gamers who have mostly disclosed everything about the game that is described on the site. Alternatively, Gamestop's used games are treated the same across the board where "Game X" costs the same as "Game X without a manual and case or even DLC". In regards to the extreme alternative of a DLC-only world, that world will never exist. Too many people still want the hard copy. Hard copies of Marvel vs. Capcom 2 (U.S. version) are still being bid on Ebay even while the game is sold as a standalone DLC. NES cartridges on Ebay are still sold and bought today even with those same games available under the Wii Virtual Console. Now, in terms of how used games puts pressure on new game pricing...well that's a whole discussion in itself.

gamerpipe
gamerpipe

Good news for GameSpot too: the bank might confuse the two and send the checks to GameSpot instead of GameStop . It is possible though, that GameSpot put their cash with Bank of Nikolai. lol

panalui86
panalui86

Good news for them! I was mainly a GameKrazy guy myself, but did make acouple purchases this quarter (3) to have a minimal contribution to that number. ha

buckybuckster
buckybuckster

Great news for Gamestop... that is until the industry converts to streaming of games as it's main source of distribution to squash the reselling. It's only a matter of time before that happens, and when it does they will face the same bleak outlook as Blockbuster, who's currently on life support with vitals weakening.

PenguinIzzy
PenguinIzzy

@SolidTy That's true; but you also have to take into account that Gamestop is not the only market for second-hand games-- you can buy second-hand games from Amazon.com, Ebay, etc. The way I see it, the price-point of video games in the second-hand market is largely dictated by time. It may be true that second-hand markets may undercut the price drop of publishers-- say, a $60 game is marked down to $55 by the publishers, and the second-hand market responds by cutting the price down to $45 used. However, there will be a point where the second-hand market can no longer undercut the publishers-- namely, around the $20 mark. If you look at used prices for video games, this is typically the bottom of the barrel, where the prices of the new game is comparative to the used copy. So, to counter your argument, the second-hand market cannot undercut the publisher endlessly-- both the publisher and the second-hand market plateau at the $20 mark a great deal of time. The main point is-- would you rather have a market which feels pressure to lower their prices and remain competitive with the existence of a second-hand market, or a market which retains full price because they are the only game in town?

PenguinIzzy
PenguinIzzy

@smbius I agree with you that developers are being ganked a little by the second-hand market. However, consider the extreme alternative: Games come in downloadable format with no boxcover or disk. If there is no hard copy of a game and it only exists as a downloadable product, then the second-hand market is completely eliminated and the profits of the game go directly to the developers and studios. We've already seen an inkling of this in the form of DLC and PSPGo, so we have some tentative case studies to go by. Look at the results of a market where sale of the product is completely in the control of the studios and developers. Prices are inflated and never go down! The prices of PSPGo downloads are marked up 10% compared to their cartridged counterparts. Worst yet, DLCs from games that are two to three years old [Map packs for Cod:Waw, for instance] remain full price at $10 per. Without the second hand market, developers would never feel any pressure to decrease the prices of their games no matter how old they are. The only way you can tolerate a market whose price-point never goes down is if you are incredibly rich. Otherwise, business will go down and people will stay away from high-priced games because they are unaffordable and continue to remain unaffordable.

PenguinIzzy
PenguinIzzy

What critics of the second-hand market tend to forget is that people will generally prefer to buy new games as opposed to used games if the prices are comparable. Why not research the latest cost of a used copy of your product and attempt to match it to remain competitive in an open market? The prices of used video games do not go down drastically, but by slow increments. New games can stay competitive to the second-hand market if they preemptively lowered their prices to remain competitive since many would prefer to buy a new copy as opposed to an old. But studios and publishers don't want to do this. They want to lock Multiplayer and put a price-point on that. Their tactics is as unfair to us consumers as how they perceive the second-hand market is to them. Instead of trying to remain competitive with reduced prices, they simply gimp the consumer by giving him half the product. Their actions are no better than the second-hand market they puport to be unfair.

Vishant
Vishant

Firstly to the guys calling for higher staff wages, they won't ever push up wages; cuts into their profits and shareholder dividends. Also to the person speaking about PC games in stores, getting worse here in the UK too, they are placed in corners with the light bulbs removed ;)

Vishant
Vishant

Firstly to the guys calling for higher staff wages, they won't ever push up wages; cuts into their profits and shareholder dividends. Also to the person speaking about PC games in stores, getting worse here in the UK too, they are placed in corners with the light bulbs removed ;)

smbius
smbius

@Thunderstarter - The people commenting here are all for steady employment and economic growth. But how a company goes about doing it is a different matter. In a single game, Gamestop has made more money than the development studio who shipped the game to them. Studios are getting cut left and right while Gamestop's capitalizes on the game flipping. Why order a million copies from the publisher/developer when you can order a hundred thousand and sell those millions of times? This is what I have an issue with.

EarthBounder89
EarthBounder89

@ AjaxNeron Not trying to be a jerk but, that's why GameStop, which is actually owned by Barnes and Noble, makes so much money. They buy the used games for cheaper than they can brand new straight from the companies. GameStop makes almost nothing from the sale of new games, but they make a profit from selling used games because they bought them for significantly less. That's why they push them over brand new ones. :)

pineapplearmy
pineapplearmy

@mjpatrick I think they just credit the gift card to your account, I don't think you get a physical gift card so check your account.

Oozyrat
Oozyrat

I always shop at gamestop and have never had a problem. All of my the used games I've bought work fine. (I got Beyonetta for $55 used a little after it came out and it looked spotless) The only thing I would complain about is that you don't get a lot for used games. But still, I've always feel welcome at gamestop and will always shop there. Congrats :D

AjaxNeron
AjaxNeron

That's crazy! Why can't they give us more for our used stuff, if they're making so much money?

ztg360
ztg360

@rangeraa im just wondering what do you think determines being hardcore because i personally don't consider myself casual but others may disagree and yes i see ur point on the whole u look at somethign before purchasing it

Roggirek
Roggirek

Cool! Now if only they paid more than minimum wage, or had a non-broken return system.

Gen007
Gen007

It would be cool if GS could take some of the clout and use it to fight back against this used game nonsense. I guess they cant tough. What could they do threaten not to carry the latest games.

bardos-the-3rd
bardos-the-3rd

it isn't such a great surprise, the year started with so many good and long awaited titles that now the rest of this year still has some great games to offer but seams that it seams rather short compard with what we already had

mjpatrick
mjpatrick

@pineapplearmy I concur completely. I got the same deal that you did for RDR (but have yet to receive the giftcard). Amazon also threw in $5 of free MP downloads. I despise GameStop, granted, they did give me $60 for a red-ringed (and out of warranty 360). I was satisfied, though not necessarily pleased, there.

kevass007
kevass007

if you havent been screwed by gamestop, your problably the guy who has boughten the other guys pre-ordered copy, and taken his exclusive pre-order content, and your time of getting screwed is upon you! they've done that to me twice, and thats all it took for me. i called customer service, and they said ok, no problem we will e-mail you a code in 2 days. and nothing. so, i will never, ever give my buisness to those slobs again. I always get better service elsewhere.

twistedmalice
twistedmalice

Of course they do well. They have mom and dad thinking that trading a game for credit towards a new one is great when they barely get half for most of the titles that are traded in.

pineapplearmy
pineapplearmy

Amazon will buy your used games for gift card credit for more money than Gamestop and you can use it to buy anything they sell. Don't believe that Gamestop has the best pre-order rewards. I got the golden weapons DLC for Red Dead, plus a $20 gift card. GameStop has never offered anything like that. When the next generation of consoles is set up for digital distribution only GameStop will be dead in the water.

masterdude192
masterdude192

I'm beginning to hate gamestop more and more for its lack of PC games in the stores. They make so much money on the consoles can they not afford to put a little shelf in the corner full of PC games?

iamtheleg
iamtheleg

Come on Gamestop....if you are making so much money stop cutting my hours!

JustPlainLucas
JustPlainLucas

Good. Maybe they can pay a little more for used games. HA! Not going to happen. :roll:

aboy1411
aboy1411

WHen there is no money your better off buying games and staying home.

spoonybard-hahs
spoonybard-hahs

@ armyofrobots No. After E-Play folded in Feburary, both Best Buy and Walmart announced that they will not be pursuing the used game market. I sometimes frequent Gamestop for new accessories, but if I want a used game, I have a nice local store here in town that still carries anything from any system.

tommy_boy9999
tommy_boy9999

I will only Shop at Gamestop for RPGs and rarer items. I was there yesterday and I actually was helping a customer pick up games for his kids instead of the employees.

efunk25
efunk25

I usually hate on gamestop for there inflated used game prices and trade-in offers but lately the web deals have been awesome. It's the best place to get new games now too with all the bonus content and Promos.

tzimisce24
tzimisce24

The only time I'll ever buy used from Gamestop is if it's a rare game, and even then if I can get it elsewhere for cheaper (and I usually can if it's not too rare), I'll get it there instead. I do, however, buy almost all my new games, the lion's share of my purchases, from Gamestop. The guys at the store I go to are all knowledgeable and friendly, the manager in particular. I dislike how their used game setup takes money from developers, but rather than buy from a big box store that doesn't specialize in my hobby, I simply elect to buy new copies of the games I want.

theMirrorsTruth
theMirrorsTruth

Are the "analysts" still confused as to why April sales sucked?

Darkfire22
Darkfire22

7 day satisfaction guarantee buying used games from Gamestop, so you know your not wasting your money. bonuses for preorders of most of the hot titles, constant promotions to boost trade and such, a discount card that comes with #1 gaming magazines that pay for themselves...I don't know what peeps problems with Gamestop is...sure sometimes certain gamestops can have employees that aren't all that great, but...trust me, they do a lot to make everything happen.

jl0pez
jl0pez

I shop at gamestop the majority of the time and don't mind used games. I'm always on a budget so I get games whenever I can get a good deal. I just bought from them Record of agarest war, SSF4 and Alan wake for less then a hundred bucks this week online.

atopp399
atopp399

I wish Gamestop still carried Playstation and older generations of video games.

Trogeton
Trogeton

This article is kinda pointless.. although I do like the pic on the left..lol

Frimmel
Frimmel

I keep seeing the used car analogy as an argument against companies creating methods to gain income from the used market. I'd like to point out that replacement items you purchase for the used car see some percentage of that purchase going to the OEM. This is either because the OEM produced the replacement parts or has licensed others to produce replacement parts. You don't think it is an accident that almost every car has a different size and style of air and oil filter do you?

mario-nin-freak
mario-nin-freak

who wrote this article, it needs to be removed, it goes against the TOC.

BobbyMaj
BobbyMaj

Anyone that is b*tching about used games and is agreeing with EA needs to open their eyes and see that selling used games is no different than a used car dealer. I bet almost everyone that is crying about used games has bought or is in a family who has owned a used car. Same concept.

K_56
K_56

@SolidTy That's why I hate Gamestop and take my business else-where when possible. Sadly, it's not possible because the Gamecrazy in my city got closed even though, according to one of the workers, they made more money than the THREE Gamestops in my city

king_cobra-r
king_cobra-r

Bought God of War III. Flawless graphics, excellent story and soundtrack. Hope they make another one.

grasshopper6
grasshopper6

I bought some used PS2 games maybe my couple dollars for those games helped them brake the 2 mil lol

Phil-teh-Pirate
Phil-teh-Pirate

I shop Gamestation or Game in the highstreet. Otherwise its Play.com, Ebay and occasionally cash convertors for those cheap 2nd hand games. Duke Nukem Time to Kill not a single scratch on it, 75p. Heart of Darkness, slight surface scratches 50p. Greggs Steak Bake and can of coke, £1.49. Playing PSONE games from yesteryear, Priceless.

Tidal_Abyss
Tidal_Abyss

@ agree el_zo1212o. I almost never use a gamestop. I only do PC gaming and they just have a little island stand of PC games, other than that, they have some game guides, those 2 things are all that interest me in there. Once I returned something and got a full refund and when the guy asks why and I mentioned something about PC and my item not compliant, you ought to have seen the disgusted look on his face. He tried to get me to use the money from the full refund in the store but I said no, there's not much for a PC in here, thanks and I left. I spent every cent acrossed the street at the Best Buy. It felt good using the money I got back from gamestop (who were rude to me because of my PC gaming) over at Best Buy who are always polite and PC friendly.

TheClown24
TheClown24

We don't have gamestop in England, jealous much? out market is controlled by places such as Game, HMV, Amazon, Play etc. all with relatively equal shares in the market :)

Kiuk
Kiuk

I think i can see why EA is pissed at companies like this