GameStop Income Doubles in First Quarter23 May, 2007 By: Stephanie Prange
Specialty video game retailer GameStop Corp. more than doubled its income in the fiscal first quarter ended May 5, compared to the same quarter of 2006 for its “best quarter ever” on strong growth in next-generation hardware, according to the company.
Income grew 111% from first quarter 2006 to $24.7 million, while revenue jumped 23% to $1.28 billion. Comp-store sales grew 15.3% during the quarter. Hardware sales leapt 75.1% on “overwhelming demand for Nintendo's Wii and DS Lite systems, and strong sales of Microsoft's Xbox 360 and Sony's PlayStation 3,” according to the company.
“Our business is benefiting from unmatched platform expansion,” said R. Richard Fontaine, chairman and CEO. “For much of the quarter, seven different platforms were represented among our top 25 best sellers. Not only was this unprecedented, but there is every indication that the Wii and DS Lite titles are attracting a new audience of gamers, while the allure of genre breakthrough titles like Guitar Hero II are expanding the audience for video game product.”
The industry is producing a “wide breadth of product selling to an ever-widening group of game players,” added vice chairman and COO Dan Dematteo.
He noted the Xbox 360 Elite and Wii consoles have been in high demand, and expected better PS3 sales as more and better game titles surface.
Fontaine admitted that sales of the PS3 had been “good, not great” at launch and then slowed after the holidays. “The price point, particularly post Christmas, is being felt,” he said. He also noted the European price of the console is high.
GameStop's top-selling video games during the quarter were Nintendo's Pokemon Diamond and Pearl, Sony's God of War II, Activision's Guitar Hero II, Microsoft's Crackdown and Ubisoft's Ghost Recon: Advanced Warfighter 2.
The chain opened 86 stores and closed 46 for a total store count of 4,816 at the end of the quarter.