GameStop seeing greater interest in Xbox One since price drop announcement
Plus, retailer says it has seen "no impact" on its business since Wal-Mart entered the preowned category
It's only been a nine days since Microsoft announced a price cut for the Xbox One, but retailer GameStop is already benefiting from the announcement. During a post-earnings financial call today, GameStop president Tony Bartel said the company is seeing "stronger demand" for the Xbox One since last week.
"I definitely think we're already seeing in our stores with our reservation program as well as dialogue with PowerUp Rewards [members that] there's a stronger demand as a result of the price drop," Bartel said. "The good news for us is... we'll sell a lot more units."
"And that means there will be more [Xbox One] units out there to put software on," Bartel went on to say. This is particularly noteworthy because GameStop's margins are better for software than they are for hardware.
The new $399 Xbox One, which doesn't come with Kinect, launches June 9. We'll have a better understanding of just how meaningful the price cut was for GameStop's fortunes later this year when GameStop reports earnings for its fiscal second quarter.
It's not only GameStop that's positive about the Xbox One price cut. Both Assassin's Creed publisher Ubisoft and Grand Theft Auto parent company Take-Two think the move is a good thing, as it should help more Xbox One units enter the market.
Also during the call, an analyst asked if GameStop's business has seen any kind of meaningful impact as a result of megaretailer Wal-Mart entering the used game space in March. CEO Paul Raines said competitors have emerged in the past and GameStop has always remained king of the secondhand market. This is no different for Wal-Mart, he said.
"We are in Texas so I have to say it's not our first rodeo," Raines said. "We have not seen any impact from our competitors entering the used space. I would encourage you to go do some trades at all of our competitors, because I think all of them are in the trade business. We have a deep knowledge of how execution looks at all of those competitors and we do not have any impact from them."