This year is shaping up to be a time of massive consolidation for the gaming industry, but even without the pending Activision-Vivendi merger or Electronic Arts' proposed acquisition of Take-Two Interactive, the gaming pie was largely divided among just a handful of companies.
That was further evidenced today in the annual financial report of specialty retailer GameStop. While the chain announced its fiscal 2007 results (and its record-breaking $7.1 billion in revenues for the year ended January 31) last month, today's report provided investors with a deeper look at where the money was coming from.
For the full year, GameStop reported that 65 percent of its new product purchases were for games and goods of just four companies. Nintendo was the biggest of the big, accounting for 21 percent of GameStop's new product sales, with fellow hardware manufacturers Sony and Microsoft making up 17 percent and 16 percent, respectively. The only other company to account for 10 percent or more of the company's new product purchases was Electronic Arts, which botched 11 percent.
Pulling back a little bit further, the top 10 vendors made up 80 percent of the company's new product sales. All told, GameStop purchases items from roughly 80 manufacturers, publishers, and distributors, meaning the bottom 70 companies account for just 20 percent of new product sales.
GameStop also shed some light on its used game sales, as that segment once again proved to be the retailer's most profitable business. Used games brought in $772.2 million in gross profits for the year, or nearly 43 percent of the company's entire gross profits. The next most profitable segment for the retailer was new software sales, which totaled $581.7 million in profits. That was followed by products that fall under the heading of "Other," which made $351.6 million, and finally, new hardware, which totaled $108.2 million in profits.