Next-gen Consoles Drive GameStop Q426 Mar, 2009 By: Chris Tribbey
The sales of next-generation gaming consoles helped drive video game retailer GameStop to fourth-quarter earnings of more than $232 million, up 22.4% compared to the same period in 2007, the company reported March 26.
For all of 2008, GameStop reported profits of just under $400 million, a 38% increase over 2007.
“In spite of the current worldwide retail environment … [we] achieve[ed] a record eighth straight year of sales and earnings growth,” said company CEO Dan DeMatteo.
New and used game sales for the Wii, PlayStation 3 and Xbox 360 helped drive the company’s profits, and allowed it to open more than 1,000 new stores worldwide in 2008, “in a very difficult retail environment,” DeMatteo added.
During a conference call with investors, DeMatteo said he’s seen “no reluctance on the part of the consumer to pay $59 for a grade-A game,” and silenced concerns that digital delivery of gaming content would replace physical disc any time soon.
“It’s been tried before,” DeMatteo said. “Internet checkpoints and congestion have caused it to fail. I’m sure it works great in a lab, but making it a reality is a different thing.”
He added that he believes Amazon.com’s new used game venture — in which consumers can send in used games for Amazon store credit — will not pose a threat to GameStop.
He also said that the company is preparing for price cuts for the PlayStation 3 and Xbox 360 this year, but did not offer any timeline.