GameStop Posts Record Quarter, Half-Year23 Aug, 2007 By: Erik Gruenwedel
Last month's price cuts to Sony Corp.'s PlayStation 3 system coupled with strong sales of Nintendo's Wii and DS Lite platforms contributed to GameStop Corp. posting its best second quarter (ended Aug. 4) and first half in history.
Net income was $21.8 million, compared to $3.1 million during the same period last year. Revenue topped $1.3 billion, compared to $963 million last year.
New hardware sales topped $293 million, compared to almost $158 million last year.
Top-selling titles included Activision's Guitar Hero II, karaoke video game SingStar (Sony), Boogie, NCAA Football 08 (EA), Mario Party 8, Pok?mon Diamond and Pearl (Nintendo) and Microsoft's Forza Motorsport 2.
In a call with analysts, Richard Fontaine, chairman and CEO of the Grapevine, Texas-based retail chain, effused about the growing mainstream acceptance of video games.
He said weekly news stories about the Wii as an aid in physical therapy and getting the elderly active underscored the vitality of the game market.
“Not only is the customer base wider, the platform spread is absolutely unprecedented,” Fontaine said. “Last week we had nine different [hardware] platforms among our Top 20 software bestsellers.”
The CEO praised consumer acceptance of pricier games ($59 and above) for Xbox 360 and PlayStation 3, which he said reflected not only price elasticity but also continued enthrallment by the more dedicated and serious gamer.
“Last week we sold almost 6,000 copies of Madden 08 for the Nintendo GameCube,” Fontaine said. “GameStop may be the only retailer in the country that even purchased for that platform.”
GameStop opened 150 new stores in the quarter and now operates 4,954 locations in 16 countries.