Gamestop Quarter Benefits from PS3, Xbox 360 Sales21 Aug, 2008 By: Chris Tribbey
Thanks to a more than 40% jump in new software sales for the Xbox 360 and PlayStation 3, video game retailer GameStop reported a sales increase of 35% for the second quarter 2008, and an earnings increase of 162%, compared to the same period in 2007.
The retailer posted profits of more than $57.2 million, compared to $21.8 million during the same period last year, on sales of $1.8 billion, compared to sales of $1.3 billion during the same period in 2007.
“In the second quarter, we produced record revenues in each of the geographical regions where we operate,” said GameStop CEO and chairman R. Richard Fontaine. “By prioritizing our investments and focusing our resources, GameStop continues to significantly outperform the specialty retail segment as a whole, when comparing top-line growth, comparable store sales and net earnings growth.”
Daniel DeMatteo, COO and vice chairman for the company, said during a conference call with investors that the installed base for the PS3, Nintendo Wii and Xbox 360 is proving a boon for GameStop.
“If we analyze U.S. videogame sales in the quarter, as reported by NPD, the growth has been driven by an ever-growing installed base of next-generation consoles and handheld systems and new genres,” he said. “And the installed base growth continued in the quarter, with these systems growing 44% on top of 55% last year, led by growth of the PS3, Wii and Xbox 360.”
Regarding Sony’s new 160 GB PS3, available in November, DeMatteo said he believes Sony wants their system to be the main media hub in the living room.
“ … We do expect publishers will develop some revenue stream by adding on digitally distributed content on selected games, but the forecast for this in total is pretty insignificant,” he said. “We don’t expect full distribution of new games to be a threat due to the game size and distribution speed, so again we are looking at this as Sony’s introduction of a system to act as a media hub.”