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GameStop rides Red Dead sales to 3.4% growth in Q2

Mario Galaxy 2, UFC 2010, Starcraft II, and NCAA Football 11 round out top sellers; specialty retailer says it has "not seen any impact" from publishers' Online Pass schemes, increased competition in market.

The US game industry as a whole continues to limp along with shrinking sales, but it's a trend not reflected in GameStop's bottom line. The specialty retailer today released its financial figures for the quarter ended July 31, showing year-over-year jumps in sales and profits.

GameStop is brushing off EA's Online Pass like a halfhearted arm tackle.

GameStop is brushing off EA's Online Pass like a halfhearted arm tackle.

GameStop revenues for the quarter totaled $1.8 billion, up 3.4 percent from the previous year's second-quarter haul of $1.74 billion. Although the company is most notable for its used gaming business, it saw a 5.3 percent spike in sales of new games. According to the company, the five best-sellers for the quarter were Red Dead Redemption, Super Mario Galaxy 2, UFC Undisputed 2010, Starcraft II: Wings of Liberty, and NCAA Football 11. GameStop's bottom line also improved, as the company posted net income of $40.3 million for the quarter, up 4.2 percent from the previous year's second-quarter take of $38.7 million.

In a postearnings conference call, GameStop executives played down concerns about recent trends like competing retailers getting into the used game business and publishers adopting "Online Pass" models for their games. GameStop CEO Paul Raines told analysts that the company has "seen no competitive impact" from new businesses in the used game space and has also not noticed any impact from onetime use codes packed into new releases.

As for how the company judges the effectiveness of the onetime use codes, Raines said, "We look at the title that had the first-use codes and we look at the trade volume and the used inventories on those and just haven't seen an impact yet." He said that only 25 percent of used game purchasers play those titles online, so locking out multiplayer features on used copies (as has been done with games like NCAA Football 11 and UFC Undisputed 2010) doesn't impact that audience.

GameStop expects things to continue growing. In the earnings call, chief financial officer Rob Lloyd said the company is increasing its forecast for new game sales worldwide from a range of 2 to 5 percent growth to 5 to 10 percent growth. Meanwhile, executive chairman Dan DeMatteo said the company believes the game lineup for the second half of 2010 is stronger than that of 2009, and the launches of Kinect and Move should return the gaming industry to growth.

88 Comments

  • pneuma08

    Posted Aug 26, 2010 2:33 pm GMT

    @supernaught360: Check out http://www.greenmangaming.com/ for an example of secondhand digital distribution.

  • digi-demon

    Posted Aug 25, 2010 11:51 am GMT

    @supernaught360
    (Time to move onto a new subject?... please...)
    PS. Regards resale of products/items - sorry but your argument doesn't hold water. When you buy a car you own the right to drive it but all design rights belong to the manufacturer - you cannot reproduce anything from the vehicle including paperwork supplied without manufacturer's approval.
    This is same with words in a book - you can read but you cant reproduce or alter without permission - same with all 99% of products, they are mostly subject to copyright. But, you can resell the book, and you can resell the car etc.. btw fyi I have always legally bought products thanks. IMO a download only future is mugs game and leaves the door wide open for copyright abuse as i'm sure you are already aware.

  • digi-demon

    Posted Aug 25, 2010 11:48 am GMT

    @supernaught360
    (Slams head onto table...)
    Again....when 'selling' or trading the respective media then the original purchaser forfeit's their legal right of accessing information/entertainment stored on that particular media - the media is purely a Key for access.
    When I 'buy' a game or DVD / CD or DLC then I am purchasing the legal right to listen, watch or play this 'information' regardless of media - usually for entertainment purposes only. I understand the owner/creators rights to the film/game or whatever do not belong to me the purchaser and respect their copyright - we only purchase the right to access the film/game/music. With physical media the disc is purely the KEY for allowing access - when you download you are registered as a user and (for as long as correct records are kept by the distributor this is your KEY) you can download again if required. BTW there is talk of legally trading/selling on legally downloaded software with same reality of original purchaser willingly forfeiting their purchased right of access.
    Put it this way, the day a software/film/music publisher offers a 7day returns policy is the day I (and many more im sure) wouldn't trade in or sell a mistaken purchase of an over hyped sub-standard product.

  • supernaught360

    Posted Aug 23, 2010 6:26 pm GMT

    @terminus You don't differentiate between an IP and a physical property. A car, for example is a physical manifestation. A song/movie/video game/poem/etc only uses physical media to print/imprint an otherwise ethereal idea on. That's the only way it can be shared (unlike physical property) or else it stays in the creators mind. I maintain there's no such thing as "used" code, anymore than there is a "used" poem, or song etc. The physical media (disc/record album/paper/SD card) is only necessary to transfer it for human consumption, which obviously isn't necessary for a physical object, like a car.

  • supernaught360

    Posted Aug 23, 2010 6:26 pm GMT

    @digi-demon How do you "forfeit" the rights to a digital code?? FYI: games exist on other media besides discs/cartridges/SD cards, namely as DLC. So by your logic, since there is no difference between the disparate transferable media, I should also be able to re-sell/trade downloadable code... interesting, I'm curious as to how you would do this in practice, with DLC - especially since you have no resale rights to the original owner's/publisher's property to begin with. Gamespot operates in a murky legal soup where our government hasn't legislated strict guidelines yet - digital code is still in it's infancy. At some point the publisher/owner is going to need better protection from companies like Gamestop, and people like yourself who (because of past practice with other recording devices, i.e. tape recorders, VHS, etc) laughably think they should have rights beyond purchase, or not purchase. Fact: the code isn't yours, and you have no ethical right to trade or resell it. The argument that it's "legal" because it isn't "illegal" is circular, and bereft of ethics, not to mention cold hard logic.

    Did I say you ever did anything illegal, btw?

  • digi-demon

    Posted Aug 23, 2010 3:48 pm GMT

    @terminus

    exactly....
    I 'own' many 'games'. Many i've purchased from new, and many I've purchased 2nd hand -IMO if I've paid for the 'hard copy' then I 'own' the game (ie own legal right to play whenever and sell on same right if I want to) - unlike digital media which is heavily pirated (and suprise suprise =- removes all customer rights regards reselling). Download only also stiffles impulse buys - because if you make a mistake and buy a 'lemon' on download then its tough luck as you are stuck with it - no refund/trade there i'm afraid....

  • terminus

    Posted Aug 23, 2010 3:35 pm GMT

    @supernaught360

    I was responding to someone saying people buy used games cause they cant afford new ones. And I was simply stating that it makes no sense since the used versions, missing the manuals and scratched to hell, are only $5 less then getting it new. But to answer your question, used is used, when someone buys a game, uses it, then sells it, it is used, lol. I know that all software is an Ip, and that You really dont OWN IT. But, you can still have either a NEW or USED ip in your possession.

  • digi-demon

    Posted Aug 23, 2010 3:22 pm GMT

    @supernaught360
    Get with the program...pal. I said I buy used* games - I dont trade them - I save money - I am doing nothing illegal - horses for courses etc. Wake up -Wake up and smell the roasted beans man - used video games exist!! - business people are making money and sensible people are saving theirs. *IMO the definition of a 'used game' : Original buyer decides to forfeit there 'legal right to access the IP on disc/media' when they trade it in /sell and 'I/others buy that same given right (which was given to original purchaser) for the use of that IP' when purchasing the '2nd hand/ used hard copys.... oh well, time to move on. I'm just sorry that I cant make it any simpler for you to get to grips with. If this is all a bit too much and you are still having trouble understanding all this and you are still getting confused I suggest you check out Ebay .

  • supernaught360

    Posted Aug 23, 2010 2:21 pm GMT

    @digi-demon The game has nothing to do with the disc. It didn't escape me you ignored that point. As far as hard drives go - who cares? I had 3 games on my previous XBOX 360 hard drive that crashed. I bought a new 360 and downloaded them again, at no extra cost.

    You keep avoiding my point that there is NO SUCH THING as a used video game. Having trouble rationalizing that, buddy? Is there such a thing as used MP3's, used Adobe Photoshop Software, or used E-Books? Answer: No. And if any of the digital data that those types of media is lost, I can get a free replacement because I already paid once. Gamestop operates differently for some reason. Answer me: if I buy Deadspace, trade it in at a huge loss, then decide I want to own it again down the road at even MORE of a loss, is that a wise way to own an IP? Get with the program. This is a scam that makes no sense considering how other industries are handling digital code.

  • beau_x

    Posted Aug 23, 2010 9:58 am GMT

    I will go out of my way to avoid shopping at GameStop.

  • digi-demon

    Posted Aug 23, 2010 8:41 am GMT

    @supernaught360
    Sorry you feel that downloading a couple of zeroes & ones is your bag. Personally I like the complete package - manual - box - the LEGAL HARD COPY etc., you know, the one you can STILL use after the original hard-drive you may have fitted in you underpowered pc/console is way past it best before. I do agree that quality of used games can vary wildly - I hate scratched disc's - but can be avoided if care is taken when purchasing... ever tried to ask to inspect them and try refusing them if scratched? I find asking for another disc usually works for me...

    @positivebalance
    Yay what a constructive argument you make...
    I do have a job thanks. By-the-way, just what do you do to earn a living? or are you the sort of person who lets their parents waste their money buying all brand new games/worthless downloads?....

  • JaxxRaxor

    Posted Aug 23, 2010 8:28 am GMT

    In terms of GameStop being a rip off in terms of used games, yeah you guys are mostly right. However you forget that a major advantage is convenience. You get better deals online, but it is a much more of a hassle. You can sell a game online for more money than what you would have gotten from GameStop and the person who buys your game will pay less than buying used game at GameStop. But it can be alot of hassle to set this up on eBay or Amazon or whatever.

    Just my two cents.

  • OzzieDeath

    Posted Aug 23, 2010 6:55 am GMT

    I can personally attest that people are stupid. When it comes to selling video games the "game advisor" will go as far as blatently lie to a customer to get a sale for a used game because as Supernaught360 said thats how they make their money. The only reason Gamestop is actually making a profit is because of the uninformed masses.

  • supernaught360

    Posted Aug 23, 2010 6:34 am GMT

    @terminus But you're still missing the point: a video game is an intellectual property (or IP), explain how it can be "used" in the first place.

  • terminus

    Posted Aug 23, 2010 12:15 am GMT

    Lol, people cant afford games, so they get used versions? The used versions, usually missing the manual, and scratched to hell, cost maybe $5.00 less then getting it new, gamestop IS a rip-off.

  • tainted_lynx

    Posted Aug 22, 2010 8:23 pm GMT

    @positivebalance I'm not sure how that qualifies that being lazy. I have a job and I find GameStop to be a ripoff as most people do. It's amazing how they rip people off.. they rip 'em a new one. The worst part of deal is that some people are just too stupid to do anything about it. You paid 65 bucks for a game and only get 10 bucks in return? Come on.

  • t0taldj

    Posted Aug 22, 2010 7:08 pm GMT

    seriously, who even cares about this?

  • supernaught360

    Posted Aug 22, 2010 7:02 pm GMT

    @digi-demon How precisely is it possible for a game to be "used"? The game is just the code on the disc, my man, not the disc itself. The DISC can be used/second hand, but there are several ways to get a game to a consumer besides discs, including as DLC. You completely miss the reality of the situation: all those games you "collect"? You don't own a single one, period. The company that published/developed it does. It doesn't matter if it's on disc, cartridge, hard drive, SD card, blu-ray, etc, all you own is the media it's (the game) is imprinted on. If you owned "the game" you'd be making the money from it. I already had a lengthy debate about this on IP Watchdog: Culture of Indifference Fuels Software Piracy Market. You and everyone else that thinks you're buying "the game" when you purchase a disc or other transferable media need to get a grip on this fast, because the times are changing.

  • acasero44

    Posted Aug 22, 2010 3:53 pm GMT

    Gamestop is a rip off and if this site is affiliated in any shape or form im taking myself to IGN.

  • positivebalance

    Posted Aug 22, 2010 3:00 pm GMT

    @digi-demon

    gaming is an expensive hobby. get a job and buy games that way. don't trade in a game you bought for $65 for only $25 at gamestop. that's just ridiculous. seriously, it isn't that hard to get a job. gamestop preys on the fact that most people are too lazy to get a job and are willing to trade in their games for measly amounts of money.

  • digi-demon

    Posted Aug 22, 2010 1:26 pm GMT

    @supernaught360

    Sorry - downloading and ripping off games is illegal and should be stopped - people trading in games and stores selling used games acceptable IMO.
    Not everyone can afford new releases and will wait to buy 2nd hand - only a games snob would say otherwise.

  • supernaught360

    Posted Aug 22, 2010 9:05 am GMT

    I disagree - Gamestop is GROWING...? When the console manufacturers evolve to the point where they're putting games out as downloadable-only, Gamestop will be dead, and it's going to happen soon. Ask any Gamestop employee/manager where they make their profits - USED GAMES. Which should be illegal to sell anyways, since Gamestop has no rights to those IP's.

    And ask yourselves this question: when you buy a game, you're only really buying a limited license to use the code for only yourself, right? It's illegal to copy and sell it (or give it away for that matter). So you decide to trade the game in, or maybe you lost it - whichever. The point is if you decide at a later point you'd like to have a copy of the original game you bought because you desire to play it again, YOU HAVE TO PAY FOR IT AGAIN. That's garbage, and a scam.

    With DLC you pay ONCE, and even if you delete it, you can download it again at a later date at NO CHARGE. So bring it on. I already have 6 DL 360 games on my drive, and I'm looking forward to more in the future, so Gamestop can rot for all I care.

  • drokmore

    Posted Aug 22, 2010 7:19 am GMT

    Kinect/move will add growth for like 1 month when all the suckers buy it and then the real user reviews come in...on the other hand software should continue strong. Some serious franchise titles on the horizon that many will likely buy new.

  • MrDouglas

    Posted Aug 21, 2010 11:14 pm GMT

    in the last sentence, replace Kinect and Move with 3DS, and you'll have a more likely scenario.

  • Mr_Manikin52

    Posted Aug 21, 2010 9:39 pm GMT

    I really weally miss you Funcoland.

  • Deity_Dude

    Posted Aug 21, 2010 5:58 pm GMT

    @swamptick Still is man. Always will be!

  • nonfanboygamer1

    Posted Aug 21, 2010 4:42 pm GMT

    Could it be because people don't want to pay $60 for a game? Hmmm???? If even $5 dollars off a game makes a difference why not consider it mainstream?

  • okassar

    Posted Aug 21, 2010 8:21 am GMT

    1.74 billion dollars in 3 months, holy crap

    I prefer buying from Amazon/Ebay or any store with a sale going on

  • Vengeful_Angel

    Posted Aug 20, 2010 5:25 pm GMT

    Should have quit earlier, mcnerk. >_>

    If a customer has a question about a gaming product, how often is it resolved at alternate retailers?
    As if they're anymore knowledgeable than the GameStop employees that apparently know nothing.

    To extend on Noah's post, a friend of mine pointed out how rich executives are scumbags, and to make the money they make would require you to be the same.

  • Noah-Phoenix

    Posted Aug 20, 2010 11:53 am GMT

    @mcnerk Couldn't have been that bad if you worked there for 6 years. One point, though - every single company that makes money from selling things in shops have utter contempt for their customers and are out to take as much money as they possibly can out of them. Its what they're there for, profit. They aint there to give you what you want, they're there to make money from you. As for treating employees with respect, name me one major company that does. Gamestop aint alone in that.

  • Megavideogamer

    Posted Aug 20, 2010 11:42 am GMT

    The launches of Kinect and Move should return the gaming industry to growth? More like the Launches of Kinect and Move could possible be new fad that ends up being trigger of the second videogame industry crash. 2012 the videogame industry crashes for the second time as Shovel ware from all three game companies in a large effort to capture the Casual gamer market flood the industry with to many motion control games that end up bombing at retail.

  • mcnerk

    Posted Aug 20, 2010 11:11 am GMT

    gamestop looks at the people who shop there as suckers. They treat the employees like garbage i know i worked there for 6 years store 5599 clayton ohio. The whole company higher ups treat the customers like fools and with that being said if you do shop there you are a fool.

  • tobelight

    Posted Aug 20, 2010 11:09 am GMT

    Gamefly=a brand new $60 game every month for just $15. Play it , beat it within a month, get another .

  • sieg6529

    Posted Aug 20, 2010 10:09 am GMT

    and yet my stock in GME is down almost 6%. I might need to unload it if they continue to keep their heads in the sand about digital distribution.

  • jdog8888888

    Posted Aug 20, 2010 8:15 am GMT

    @RhythmMan Do you get better service\knowledge at Best Buy, Walmart or Target? Online stores? I do not for sure. I will not say the Gamestop employees are perfect. But, the store definitely lets me enjoy being surrounded by gamers.

  • McNeelyJ39

    Posted Aug 20, 2010 5:16 am GMT

    I find the last half sentence funny. The Move and Kinect launches will drive industry growth? HA! That is a hoot.

  • Humorguy_basic

    Posted Aug 20, 2010 3:52 am GMT

    This editorial makes it seems like game sales are increasing, but when you look at how many retailers have closed, or stopped carrying PC titles, etc, this growth at Gamestop is just not enough.

    If 100 stores sold 100 games and 80 stores closed leaving 20 stores that sold 25 games, those 20 stores have seen an increase but game sales would be down by 75%!

  • SicklySunStorm

    Posted Aug 20, 2010 12:17 am GMT

    to all those arguing over whether Gamestop employees know their stuff or not - what's the point in arguing when you're never going to agree? None of you are right or wrong, you just have your own experience to go on. If one guy praises the staff and has a great experience, then a sweeping statement saying "all Gamestop staff are useless" holds no water, because plainly in at least one store, they do know what they're doing. Similarly, arguing that all Gamestops are great is just as silly, because there are plainly some stores out there who employ amoeba according to others accounts.... instead of arguing "i'm right, you're wrong", why don't you present your example in a clear light and avoid screaming to everyone else that "they're wrong"?

    My own personal experience of Gamestop staff was that they were very helpful and reasonably knowledgable - but that's one store. I'm not for a moment saying my example means that all store staff are great, but it does mean that those saying they're all useless are clearly disregarding examples of where people like their service.

  • Solidsnake7993

    Posted Aug 19, 2010 11:39 pm GMT

    can't you rank up more quickly by arguing over the internet?

  • Accuracy158

    Posted Aug 19, 2010 11:29 pm GMT

    I think I already covered my full view of that franchise in a blog post.

    http://www.gamespot.com/users/Accuracy158/blog?tag=all-about%3Bsee-all-blog-posts

  • positivebalance

    Posted Aug 19, 2010 11:21 pm GMT

    @jdog

    wrong. gamestop is a pawnshop. they want to buy your games cheap and sell them for much higher. the sad part is that suckers will continue selling games they bought for $65 for less than half of that. gamestop isn't full of "hardcore" gamers. not always. most of the time they'll hire girls just because they know girl gamers are a "rarity" and will attract guy gamers.

  • RhythmMan

    Posted Aug 19, 2010 10:40 pm GMT

    @jdog8888888, Hi there Gamestop employee! Gamestop employees don't know jack sh1t. Every time I overhear them giving false/incorrect information I interrupt and inform the customer of the true information.

    My source: years of experience with Gamestop/EB Games employees. They're full of sh!t and whatever industry info they THINK is true they spread to all their customers like gospel, only to be totally wrong. I used to manage an EB Games (same as Gamestop) store in Southern California, and had to constantly correct my employees and their uneducated information/gossip. Not only that, the pressure to bump sales numbers and get as many used games in for profits outwieghed actually giving the customer a good deal. The home office (Gamestop Corperation) lowers the credit you get for a used game by 20-30% just before they offer "an additional 20% trade-in credit for used games". It's a sham, any employee claiming not to know is lying to your face.

    I've heard such crazy things said as "God of War III will be multi-platform", and "the new xbox will have Blu-Ray". LOL

  • jdog8888888

    Posted Aug 19, 2010 8:56 pm GMT

    Gamestop is awesome. It is all about customer service. You walk in and know every employee is a hardcore gamer. That is just awesome. They know about games because they love it. You walk in a major retailer, they know diddly other than what is selling and how to open the glass case to get you your game. Gamestop will call other stores nearby if they dont have your game, even if you are looking for it used. I've been going to these babbages\ea games\gamestops for a long time, and gamestop is on top of their customer service game right now. This is why they sell.

  • Waldkrieger

    Posted Aug 19, 2010 8:55 pm GMT

    @meke186 I know exactly why Gamestop has "exclusive" content and I completely am against it. Period. It should not be allowed. Everyone should be able to get exactly the same thing no matter which store they purchase it in, and this is why I dislike Gamestop. As far as trade ins, I do not trade in games, I keep them. I don't buy things just to get rid of them at 25% the price. Gamestop has become to much of a greedy corporation, hence why I rarely shop there.

  • meke186

    Posted Aug 19, 2010 7:05 pm GMT

    ha got you again

  • lookin_boy

    Posted Aug 19, 2010 7:04 pm GMT

    yeah maybe you should

  • meke186

    Posted Aug 19, 2010 7:04 pm GMT

    Hotwheels beat that i just gave you thumbs up. Oh wait you can't beat that (Gamestop Is Okay i guess Guess

  • meke186

    Posted Aug 19, 2010 7:02 pm GMT

    fine maybe ill just give you 5000 thumbs up

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