GameStop Talks Switch's Positive Impact, Its Continued Focus On VR, And More
GameStop saw "robust sales" for Nintendo Switch during the latest quarter.
Update: GameStop's post-earnings conference call has concluded. We've rounded up some of the most interesting things the company had to share, and as expected, there was quite a lot of talk about Switch.
- GameStop sold more copies of The Legend of Zelda: Breath of the Wild for Switch than it did Switch consoles.
- The company doesn't know how many Switch units to expect during fiscal Q2 (which runs through July).
- Most of GameStop's allocation of Switch systems sells out online before it even makes it to its warehouses.
- "Nearly" six pieces of software and accessories are being sold for each Switch system GameStop sells. That's nearly "double that of the rest of the industry."
- GameStop was "heavily allocated" on Switch, but it was still at a level below current-gen consoles (PS4 and Xbox One are around 50%).
- GameStop doesn't know when Switch supply problems will be resolved, as it hasn't "seen supply even come close to matching demand at this point."
- Red Dead Redemption 2's delay was a factor on the company's guidance, but its moving out of the fall means some people who would have bought the game will now buy other things.
- "We are still very focused on VR. PlayStation VR continues to be our No. 1 product, but we're kind of waiting for E3 on that [to talk more about VR]," CEO Paul Raines said.
- GameStop forecasts full game downloads on PS4/Xbox One to be around 35%, and about 5% for GameStop.
- By contrast, Nintendo has "very, very low full game download penetration." As a result, GameStop "doesn't see that as a real threat," Raines said.
- Nioh, Persona 5, and Has-Been Heroes all did well for GameStop during the quarter.
- Kongregate is a "really important asset," but it also helps GameStop to establish relationships and partnerships with companies that can in turn be leveraged by its collectibles business.
- PowerUp Rewards members have reached 53 million, and there's been a "dramatic increase" in new paid Pro members. Paid memberships are up 16-17% compared with a year ago.
The original story follows.
GameStop has reported the results for its first fiscal quarter of 2017, which ended on April 29, 2017. Sales were up for year-over-year, thanks in part to what the company described as "robust" sales for the Nintendo Switch.
Total global sales were up 3.8% to $2.05 billion for the quarter, while comparable store sales were up 2.3%. International saw a big jump of 17.1%, while US store sales were down 2.3%. New hardware was up 24.6% due to the March launch of Switch, whereas new software was down 8.2%. GameStop said that decline is due to "tough overlap" with games released during the same period last year, which included releases such as Dark Souls III, The Division, and Street Fighter V.
Net earnings were down to $59 million from $65.8 million, but there were other positives. Recent years have seen GameStop attempt to diversify its business, and those non-gaming areas continued to grow during the quarter. Collectible sales were up 39.1% to $114.5 million (attributed to "strong global sales" of Pokemon products), while Technology Brand sales were up 21.5% to $201.4 million.
GameStop will host a conference call with investors and analysts this afternoon to discuss its quarterly results. It's been known to share interesting tidbits during these; we'll report back with anything noteworthy that it has to share.
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