GameStop profits nearly triple

World's largest specialty retailer reports record Q2 earnings on $1.8 billion in sales for the three-month period.

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It's becoming difficult to remember the last time that GameStop wasn't besting its year-over-year quarterly earnings. The largest specialty game retailer in the world announced today that it had continued its trend of record-setting financials into its second fiscal quarter, seeing revenues rise sharply and profits nearly triple.

For the period ended August 2, GameStop raked in $1.8 billion in sales, a 35 percent year-over-year increase. If that number sounds familiar, that's because GameStop also pulled in $1.8 billion during its first fiscal quarter. GameStop's net profit soared an astounding 161 percent from the same period a year ago, rising from $21.8 million in Q2 2007 to $57.2 million for the current reporting period.

Noting that current-generation software sales rose 43 percent for the quarter, the specialty retailer laid out its top-five best-sellers. Take-Two and Rockstar Games' Grand Theft Auto IV was on store shelves for only five days before GameStop's Q1 ended, yet it still managed to land the top slot for the retailer's reporting period. Despite falling out of NPD's top 10 list by June, the highly acclaimed action adventure still managed to secure the top slot of GameStop's charts in Q2. Following GTAIV in descending order were Konami's PlayStation 3-exclusive Metal Gear Solid 4, EA's NCAA Football 09, Nintendo's Wii Fit, and EA's Battlefield: Bad Company.

Thanks to its better-than-expected results, GameStop also revised its full-year earnings guidance upward. The specialty retailer now projects total year-end sales to increase 23 to 25 percent. Earnings-per-share projections are now anticipated to grow by 36 to 39 percent from a year prior to between $2.45 and $2.50.

Discussion

160 comments
Jazz_Fan
Jazz_Fan

[This message was deleted at the request of the original poster]

Jazz_Fan
Jazz_Fan

[This message was deleted at the request of the original poster]

Frost259
Frost259

Games cost more now because it cost more for devlopers to make them, the reason profits are soaring is that the gameing market is sky rocketing gameing is huge right now, games get more hype than hollywood movies and more and more people are starting to play.

SDMF_TrueBlue
SDMF_TrueBlue

So if GameStop is making so much profit, why are new titles for the 360 and PS3 $60? Games cost us consumers more than the previous generation of consoles, but profits for retailers soar. Coincidence? I don't think so...

dalejrgamer
dalejrgamer

This proves that GameStop's sponsorship on Joey Logano's Joe Gibbs Toyota in the Nationwide Series truly paid off. Then again, there's like three GameStops within the town of Garden Grove and Anaheim.

555fabulous21
555fabulous21

That goes to show you, people pay more at gamestop then other game stores.

bifordus
bifordus

Where I live, there are 3 gamestops less than 1/4 mile apart. 2 of them happen to be in the same mall. Its a little worse than Starbucks...

toyota23
toyota23

WOW they are like starbucks!

subrosian
subrosian

@covenus That question is asked in a way that sounds like an accountant trying to talk to a kid on a street corner about itemizing his taxes. If you're in Best Buy corporate and you're serious about improving BB's gaming, give me a PM - GameStop is an interesting beast to address.

gho5ty
gho5ty

gamestop should change there name too rip off

drumbreak1
drumbreak1

ahahahahaha 25 cents that a damn joke lol

jaredodd
jaredodd

Yeah that's easy when you rip people off on trade ins. They were trying to give me 25 cents for Perfect Dark Zero and it was in perfect condition.

Losarii
Losarii

Well yeah, when you sell memory sticks and accessories at almost 3 times the price you're bound to get 3 times the profit. I was going to purchase a PSP memory stick and it was $40 more than what they sell that same memory stick for at Bestbuy. You also tend to get huge profits when you buy used games for half the price and sell them for 5 dollars less than full price.

norman_bell
norman_bell

I work for EB games and the idea of being able to buy games before they are out is sweet I am a proud owner of GTA 4 and the more they sell the better chance of them making a GTA5 maybe not but I like the idea

Akivaria
Akivaria

I'm not a big fan of gamestop, but I like being able to pay incrementally for upcoming games. The one near my home has good service. Overall though, I'd say go to an electronics store. You'll almost certainly get a better deal.

world69star69
world69star69

What do you mean eliminate pc game sales, I go into gamestop all the time..there are two of them in my town, less then 1000 feet from each other, separated by a road(two shopping centers). Each one has pc games there are three sections directly in front of the cash register in one store, and in front of the xbox stuff in the other. They keep putting new pc games in those stores. So I don't know what you are talking about.

andrius45
andrius45

okay gamestop came out around the time when i was in high school which was around 2000(maybe earlier , this was the first time i went to a gamestop but i think i remember one somewhere around 1998) i did'nt even know there was a place called gamestop or eb games (how it was named back then). but what was great was the pre order, you see i did'nt have a job back then and getting one was difficult(plus i was 14). anywho with gamestop i could make a reservation and try to pay it off little by little it's like having an early credit card except there's no bastard trying to charge me evrymonth for interest charge. so for people who don't have a job or who are in high school and can come up with 5 dollars every now and then. the blow of buying a video game feels a lot less brutal, that's how i did it back then and that's how i'm doing it until i die.

xyboink
xyboink

i can't understand why gamestop eliminate the PC game sales. If they don't do that, the sales will be clearer. It means that the figures is not exactly in this news. but if you see the figures; it seems that TakeTwo are in good papers. They won't go bankruptcy and their future is also certain with new (maybe good sales) games such as Metal gear Solid 4, BattleField: Bad Company. I think that the games of the publisher TakeTwo are the best ranked game than these from EA !

lokar82
lokar82

I have to agree with everyone who says if you don't like it, don't go there. I hate Gamestop ever since they decided to eliminate PC game sales, endlessly promote used games over new and stop selling new games that weren't pre-ordered. And so I don't go there. To all that hate them like me, do the following: Trade your games in to a local games shop or sell them on Ebay/half.com if your town doesn't have a local games shop. You don't need to pre-order games at all since I always see plenty of copies of any new release at Best Buy/CC/Target or you could buy from amazon. Gamestop would die if everyone could do these easy steps.

gebs99
gebs99

Im from El Salvador (Central America for those who dont know)i was in miami 2weeks a go and i went to gamestop and bought some games and traded others. Perhaps YOU feel its a rip off but in my country the best you get for a game in GOOD condition is between 15 to 20$ and thats if youre good at negotiating. I didnt feel ripped off but i dont know other stores that buy your used games and how much they give you for them im just comparing to the stores in my country.

mjpatrick
mjpatrick

To covenus - Easy answer: lower prices or include (meaningful) free items. For example, get Call of Duty 4 free with purchase of Call of Duty 5. Throwing in an extra poster, sticker, et cetera doesn't entice me.

covenus
covenus

I work at a small market Best Buy store and the GameStop in our town crushes us. Recently I took over leadership of our gaming department and realized that when GameStop is selling out well in advance on most major new releases, the only traffic we get are employees with the day off. So to all of you who are posting here with problems with GameStop, please tell me this: what can Best Buy do to serve your gaming needs better?

NND1
NND1

Its nice to have alll those video games in one place but that store is a major RIP!

sandshark8
sandshark8

The people who work in the Gamestop near me are all really lazy and mean. They don't care at all if you're standing in front of them at the cash register and their cell phone rings and Humidity is right, their trade-in values are crap. I try to buy all my games from Best Buy and Circuit City

Humidity
Humidity

Oops, hit the wrong button too soon. Anyway, to continue, trade-in prices are a rip-off, new games are sold without their cellophane wrapper, and the return policy only gives you seven days to return a used game if it doesn't work. Oh, and I work there, and I'm really tired of putting up with you whiny, want-something-for nothing, coming in with a huge bag (sometimes two) of trades at 8:45 PM when all I want to do is close up and go home to see my family, bastards. Go buy your sh1t at Wal-Mart; I don't get paid enough to really care. Have a nice day.

Humidity
Humidity

EVERYONE PLEASE STOP SHOPPING AT GAMESTOP.

Humidity
Humidity

EVERYONE PLEASE STOP SHOPPING AT GAMESTOP.

necronaux
necronaux

Is it any wonder they're making a profit? When they sell used, they don't share any revenue with mfgs, developers, etc., right?

subrosian
subrosian

@godzillavskong Are you willing to pay $5 more per game purchase for better customer service? That's the real question, for most people the answer is "no" - so they don't offer that service. The "better" college students are looking for around $8 an hour, and most will seek at least $12 an hour when they graduate. Within two ~ three years, their expectation is to be making $15 ~ $20 an hour (at least) - so realistically the salary cost for getting skilled help is 60 ~ 100% higher per employee. - Instead they'll offer something in that salary range only to the store managers - but the problem here is that you can't hire tech-savvy business grads at that price - a basic "little experience" MIS student costs $45,000 a year straight out of college, and $65,000 by the time they're three ~ five years out. So what we wind up with are high school and college kids, with a store manager who majored in Psych :P - with the "skill" really being at the corporate level - where you will never see them.

mrkame16
mrkame16

ctburesch Posted Aug 22, 2008 10:32 am PT residentzombie2..Gamestop hardly ever buys the building that they are in. Most of them are commercial leases and no they do not pay property taxes either, They are paid by the leasing company. Please know what you are talking about....not only that, his reasoning makes little sense since the story speaks for itself "GameStop profits nearly triple" so, dont feel sorry for GS they dont care about there consumers its a cash cow.

subrosian
subrosian

Think GameStop is ripping you off when you trade in games? You're right - so stop trading in games with them. Otherwise, stop whining, profit isn't evil, and it's not their job to be your friend or mother. All the comments make it clear, you feel ripped off, the customer service is subpar, they treat their employees badly - so, let me ask you a simple question - why continue to shop there? I talk to dozens of people every month who will complain about stores, and yet they continue to shop there. I hate Walmart, I feel they're an ethically bankrupt company that encourages manufacturers to cut corners, holds their employees in wage slavery, and uses lobbyists to create a legal environment that destroys the rights of the people in the countries in which it operates. Y'know how I stop them? By not shopping there - or any store owned by them. I pay a few cents more to buy products made in a responsible way. So if you don't like it - if you're not happy - you have a choice - continue to shop somewhere that pisses you off, and that you feel rips you off, or grow up and take responsibility for your contribution.

tellee
tellee

I think gamestop is a craptastrophe of a videogame store in glendale arizona they really suck I been going to the same 1 for over 5-6yrs and i still need and id to make a trade? come on now, they rip u off with store credit rip u off even more if u want cash they dont appreciate "loyal customers" you go to the store over and over and they still have to type your name and address in a computer inconvienince to u and u never know what your really being offered because u never get to see that handy dandy little computer screen...have any of u (customers) ever seen what the computer screen says? no 1 knows how much they are charging what they should be charging nothing GAMESTOP on 43rd ave and bethany home glendale,arizona sukkks major rectum and hence the 3 k's cuz if u saw a black person working in game stop you just saw a leprechuan with 2 4 leaf clovers and pot full of gold

bukkookkub
bukkookkub

If i have to buy used, screw gamestop. Go to (half (dot) ebay (dot) com) games are so much cheaper there.

FabioPizzini
FabioPizzini

In italy the clercks are TRUE jerks, they don't know anything, they are always busy so they avoid to talk to you ... GameStop here in italy it so not very good!

ldonyo
ldonyo

Used games are almost pure profit for GS, so this trend is very likely to continue.

ctburesch
ctburesch

residentzombie2..Gamestop hardly ever buys the building that they are in. Most of them are commercial leases and no they do not pay property taxes either, They are paid by the leasing company. Please know what you are talking about

residentzombie2
residentzombie2

dem5000 Okay buddy you must not know that Gamestop stores have to buy the building they are located in ($100,000), have to pay property taxes to the city they are located in, have to pay all their managers and employees hourly wages, and still have to try to make a profit. I have heard from many retailers even though a game costs $60, they profit very little from that amount, most of that $60 goes to the game publisher. If they didn't resell and buy used games, they would not be able to stay in business due to small or no profits. If you start a business the goal is to turn a profit and that is it.

residentzombie2
residentzombie2

B1G_DADDY The reason Gamestop gave you so much for Twilight Princess is because it is still a popular and sought after game. Now if you traded in L.A.I.R. or Haze a year after the game game out you would get between $15-$25 at most even if they would buy it from you at all because gamers no longer are interested in those overhyped games anymore. It all comes down to supply and demand and there is big demand for Zelda and little supplies because gamers tend to keep great games in their collection.

dem5000
dem5000

Yeah, that's because they make quadruple profits on suckers buying used games for 5 dollars less than a new one, and having their sales reps just assuming that you want a used game even though you never asked for one. And their lame deals like "Up to 10% of your trade in to go towards a preorder" Which amounts to like 2 dollars in savings. I liked them before they merged with EB. Then, if you don't get to the used game for a month and it doesn't work, or crashes somewhere in the middle, you are just SOL.

War_Martyr
War_Martyr

Sweet...as long as video games are a hot commodity, stores specializing in them will profit bigtime. And at least GameStop knows the stuff they're selling me. At least, the ones where I live.

mariokart64fan
mariokart64fan

um now bring back all those classic games now !!!! i need top gear 3000 sad thing is gamestop will never carry it lol

plastikman88
plastikman88

hey did u guys wanna reserve anything while ur here? i hear Conan for the PS3 is gonna be awsome very good reviews... and also chronicals of narnia... cant go wrong with narnia.. hey do u have a discount card? NO U SAY? Well would u like to get one? it saves 10% off of any used game or accessorie... are u sure? do u wanna reserve madden?> no? how bout fifa? no? u sure they seem awsome!!! come on man!!!! RESERVE SOMTHIN!!!! YUP i work for gamestop... plz dont shop there again... if u really knew how much over profit they make off trade ins u will crap ur pants...they make 1.8 billion.. u would expect for them to be somwhat nice enough to at least give u have of what u paid for of a game or maybe 40%?? anyway i hate working there...

Kezman118
Kezman118

We dont have gamestop in Hong Kong...

Ubermensche
Ubermensche

They are bastardly. I used to work for both companies when they were still separate. Although it isn't really different than selling your used car back to a dealership. On another note, Gamestop amazes me that they have been so successful despite current economic situations. Retail sales overall are terrible and consumer confidence is at an all time low. Gamestop has made the necessary changes to keep increasing profits despite a worsening economy the past few years. Whether you hate them or not, try and give credit where credit is due.

godzillavskong
godzillavskong

Their markup on trade-ins is insane. I prefer to buy new, because the developer doesn't see any of the $ from a used game purchase, although if it is a huge savings (for me thats over 5$) then I'll pick up the used copy.I wonder why such a huge company, which obviously is making a killing, is paying its employees under $7 hr? Raise the bar, get some experienced employees and offer them decent wages, and then some of us won't have to talk to complete idiots when we shop there. I have a EB games and Gamestop in my neighborhood and when Gamestop bought out EB, a lot of the staff still remained at EB, which is like night and day when you compare the two. The EB staff seemed to have more knowledge and respect for games, versus the Gamestop employees all seemed like young teenagers who would rather joke behind the counter then help out a customer. Sorry to rant , and I know there are some good Gamestop employees out there, but just my experience.

wrednajasobaka
wrednajasobaka

I decided not to shop at Gamestop ever again. I bought used Assassin's Creed for 50$. Played it for few days and decided to trade it in. The wanted to give me 17$ credit. So let me get this right: they would give me 17$, sell it as used for 50$ and have 33$ of pure profit? No, I'd rather give it way for free.