GameStop Reports Record-High Sales for 2010

GameStop Reports Record-High Sales for 2010

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GameStop reports record-high sales of nearly $9.5 billion for its financial year, driven in part by substantial growth in digital sales on both consoles and the PC.

The digital future looked to be an ugly one for GameStop, especially in light of what happened to Blockbuster, the once-mighty movie rental behemoth that recently declared bankruptcy. But don't shed any tears just yet, because based on its financial results for the 2010 fiscal year, the company is doing just fine, thanks.

GameStop rang up record-high sales of $9.47 billion for the year ending January 29, 2011, a year-over-year increase of 4.3 percent, with profits jumping 8.1 percent to reach $408 million. GameStop's experiments in the digital market appear to be paying off particularly well, as digital sales surged by 61 percent to $290 million for the year.

"Our innovations in e-commerce, digital offerings and PowerUp Rewards helped drive record sales, earnings and market share," said GameStop CEO Pail Raines. "Our focus in 2011 is to build on the success of our PowerUp Rewards program, expand our used business and increase our digital revenues, all while delivering strong financial results."

Used game sales totaled $2.47 billion, an increase of $75 million over the previous year and a hefty chunk of the overall business, but actually shrunk as a percentage of sales because of the dramatic increase in digital revenue. That's good news for the company, as digital sales become an increasingly accessible and attractive option, forcing GameStop to find some way to compete with online retailers.

"We believe this is a notable achievement as the company seeks to diversify its revenue base and take share online as a digital aggregator," said Lazard Capital Markets analyst Colin Sebastian. "Even assuming slower growth in digital going forward, digital should represent a half billion-plus revenue opportunity for GameStop within the next two years."

And for another year, at least, I'll still have a place to buy my boxes.

Source: GamesIndustry

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I am one of sixteen people on this site who views this news as a good thing.

They're digital strategy is basically redeemable codes...But I can't see anything else they can really do, considering the way console DLC purchases work.

Onyx Oblivion:
I am one of sixteen people on this site who views this news as a good thing.

The hatred against Gamestop can't be that bad...can it?

Either way, I see it as good news as well.

I'd like to see GameStop try to take on Steam.

JeanLuc761:

Onyx Oblivion:
I am one of sixteen people on this site who views this news as a good thing.

The hatred against Gamestop can't be that bad...can it?

Either way, I see it as good news as well.

Haven't really seen that much hatred against GameStop coming from the escapists. I thought it was just the gaming industry getting PO'd about resale profits.

And I'm just glad there is one less company I don't have to worry about going out of business.

Recession? What recession?

I'm from the UK so I have no idea but I guess they are the US equivalent of GAME if so, yeah well done guys

Why Gamestop!
Digital Distribution may be profitable, but it's inherently evil.
You were one of the good guys of the industry, don't be like Valve!

Onyx Oblivion:
I am one of sixteen people on this site who views this news as a good thing.

They're digital strategy is basically redeemable codes...But I can't see anything else they can really do, considering the way console DLC purchases work.

I like Gamestop aswell, never met idiots who didn't know what to do there always been people who knew what they were talking about.

Oh, what is that? I thought everone thought that Steam was killing GameStop. Looks like DD isn't all that much.

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Before or after the gamer had to buy a quarter of the game as DLC?

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Until someone can explain to me why video games are in any way unique relative to used cars, books, movies or music, this argument holds absolutely no weight for me.

Shycte:
Oh, what is that? I thought everone thought that Steam was killing GameStop. Looks like DD isn't all that much.

That would be a much better comeback if a large portion of their success here has been attributed to digital sales. You know, DD. It looks like DD is all that much.

What it does look like is "Project Ten Dollar" ain't exactly killing GS, either.

JeanLuc761:

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Until someone can explain to me why video games are in any way unique relative to used cars, books, movies or music, this argument holds absolutely no weight for me.

Well, technically, he hasn't made the argument yet. He merely asked a lead-in.

Shycte:
Oh, what is that? I thought everone thought that Steam was killing GameStop. Looks like DD isn't all that much.

I don't think that gamestop usually even carries very many pc games.

JeanLuc761:

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Until someone can explain to me why video games are in any way unique relative to used cars, books, movies or music, this argument holds absolutely no weight for me.

It's not unique to the video game industry. The fact simply is, people are vindictive about shit that doesn't really matter.

But stores that specialize in games, such as gamestop, require additional revenue from used games, bought back far, and i mean far, cheaper than the $40.00 to $50.00 dollar wholesale price.

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

The developers got a percentage of the original sales. Used games never sell for as much as new ones. Assuming a used game costs half as much as a new one and assuming that a quarter of the price of a game goes to the developers, the devs made $1 billion on the original sale of the games.

So, the devs got none of the money from used sales, but they made $1,000,000,000 the first time the games were sold.

JeanLuc761:

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Until someone can explain to me why video games are in any way unique relative to used cars, books, movies or music, this argument holds absolutely no weight for me.

It isn't much different the only thing that I hate about Gamestop and their used games is on launch day they have games for $5 cheaper under the USED game. Also another thing that I don't like about a lot of game stops is that they gut new games. Neither of the two gamestops I go to do this so it isn't a big deal for me. But pretty much the thing is that I buy a new game so that I am the one that opens it and I know that I am the first one to touch it so that any problems with it are the game itself and not something that happened while it was getting stored in the envelopes by the employees.

I just bought stock in the company.

JeanLuc761:

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Until someone can explain to me why video games are in any way unique relative to used cars, books, movies or music, this argument holds absolutely no weight for me.

They used to be the same thing. That was until Gamestop started gathering a monopoly on used game retail and started gouging the price so that a used game is only a $1-2 savings from a new copy. Nobody cared about used game sales when they were being sold for $10-15 on average because those people buying titles at that price would either not have been able to afford a new game in the first place (they wouldn't have made a sale anyway) or would still have enough money left to buy a new game as well.

You look at books, movies, music, or cars and you'll see that there is a much bigger difference between the new price and the used price.

JeanLuc761:

Onyx Oblivion:
I am one of sixteen people on this site who views this news as a good thing.

The hatred against Gamestop can't be that bad...can it?

Either way, I see it as good news as well.

Considering how much GameStop has grown in inverse proportion to their savings on a used game (think, 2 bucks.), I see this as the reason why incentives like Project Ten Dollar exist today (apart from, you know, stingy gamers and an even stingier company).

Also, allow me to deliver a personal message to the ass-hat who thought GameStop Exclusive DLC was a good idea: FUCK YOU.

Greetings from Dubai.

JeanLuc761:

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Until someone can explain to me why video games are in any way unique relative to used cars, books, movies or music, this argument holds absolutely no weight for me.

Whenever you see the "how much went to the developers?" Question brought up, the author is usually asking "how would my pirating the game have been any worse for the industry than buying used?"

If you interpret that as an argument for piracy, well, what weight it has depends on what stance you hold. If you interpret it as an argument against Gamestop, there's plenty of weight.

The argument for buying new in order to help perpetuate the jobs that generate the product is by no means unique. Buy new cars in order to help the economy even though used cars are a better deal, buy the book to support the author even though you can borrow it from the library for free, watch the movie in the theater to help box office performance even though you could just catch it on Netflix a few months later, etc. etc.

I think the argument is against all retailers that buy used goods very cheaply and sell them at very high prices; they are basically only putting money into their own pockets. Are these retailers really worth supporting? I'm sure that people who utilize their Library, Netflix, Gamefly, Steam etc. would say no, and I'd be inclined to agree with them. Retail is, by its very nature, inefficient. And because waste is one of the worst consequences of capitalism, I'd like to think videogames can help lead the way in making the world economy more efficient. And, I'm sure, this also holds true for most people on the Escapist.

But perhaps most simply, you're on a website frequented by people who love videogames. I'm sure there are many videogame studios that could have really used a chunk that 2.47 billion, and that many more great videogames could have been made if they had access to it. If that's the argument, why disagree?

constantcompile:
-snip-
1) I think the argument is against all retailers that buy used goods very cheaply and sell them at very high prices; they are basically only putting money into their own pockets. Are these retailers really worth supporting? I'm sure that people who utilize their Library, Netflix, Gamefly, Steam etc. would say no, and I'd be inclined to agree with them. Retail is, by its very nature, inefficient. And because waste is one of the worst consequences of capitalism, I'd like to think videogames can help lead the way in making the world economy more efficient. And, I'm sure, this also holds true for most people on the Escapist.

2) But perhaps most simply, you're on a website frequented by people who love videogames. I'm sure there are many videogame studios that could have really used a chunk that 2.47 billion, and that many more great videogames could have been made if they had access to it. If that's the argument, why disagree?

I can understand that argument but the primary issue with it, especially with Gamestop is that used sales are where the company makes profit. Gamestop can't make profit on new games because that money goes to the publisher/developer. While the difference between trade-in value and selling value is often large, there's a reason for it. Beyond that, it's up to the customer to choose a good time to do their trades. A few weeks ago, Gamestop had a 50% trade in bonus (60% if you have a PowerUp Pro card) and people were making obscene amounts in trade-in.

2) Maybe I should expand my point of view a little. I'm not trying to rip developers off, far from it. My only real problem with this whole debate is that some publishers are acting like video games are the exception to...well, basically all other products and that "second sales" should not be allowed. Saying that buying a used game is equivalent to piracy is just plain excessive.

Good job Gamestop.

I just want to say thanks too... they let me return Crysis 2 for a full refund 3 hours after purchase. I thought I was s.o.l. and was only going to get back $30. I don't know why I thought I would like it, the graphics looked pretty at least. I guess I'm not as much an FPS fan as I was before.

THANKS GUYS!

(Still haven't bought anything from them digitally yet tho)

Well, this past year wasn't exactly hard for sales. We had the PS Move, The Kinect, WoW Cataclysm, and plenty of other big releases.. I'm not really surprised that sales jumped.

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

The same amount when people sell used games on e-bay.

Sober Thal:

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

The same amount when people sell used games on e-bay.

Don't forget Craigslist.

I don't see how they're expanding their used game business when just yesterday they were saying they no longer handle GBA games. I am glad I picked up Metroid Fusion, Castlevania: Circle of the Moon, Castlevania: Harmony of Dissonance and Castlevania: Aria of Sorrow last year.

JeanLuc761:
I can understand that argument but the primary issue with it, especially with Gamestop is that used sales are where the company makes profit. Gamestop can't make profit on new games because that money goes to the publisher/developer. While the difference between trade-in value and selling value is often large, there's a reason for it.

Even with this in mind, the bottom line is that every extra dollar spent bringing the product from the developer to the customer is one less dollar for the developer. How many games have you looked forward to that were canceled due to the developing company having to tighten its belt? How many people have overpaid for low-quality videogames? Where middlemen are concerned, the consequences outweigh the benefits for the gaming industry, even if there is a reason for it.

JeanLuc761:
2) Maybe I should expand my point of view a little. I'm not trying to rip developers off, far from it. My only real problem with this whole debate is that some publishers are acting like video games are the exception to...well, basically all other products and that "second sales" should not be allowed. Saying that buying a used game is equivalent to piracy is just plain excessive.

In, say, South Korea, where modded Xbox 360s and pirated games are sold by small businesses, what is the real difference between buying a used game and buying a pirated game? You tell me. Say the small businesses has to make up for their losses in selling new games by selling pirated games at insane discounts - where's the foul? Whatever money the customer loses by not being able to resell their games to the business is made up for by their savings in buying pirated games.

In terms of price, at least in the USA, used videogames are the exception - the markup is insane. I don't think that they should be disallowed, but I think that minimal-overhead digital distribution is the way of the future, and that the future can't come fast enough. There's more money for the developers, and less cost for me - especially during Steam's insane sales.

DTWolfwood:

Used game sales totaled $2.47 billion

so what part of that went to the developers who made the games? just curious.

Y'know EA did that pay for online thing to make up for that and now I hate them. BUT, since I hate Activision SOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOOO much more, (no sarcasm) I can stand them.

SanguineSymphony:

Sober Thal:

DTWolfwood:
so what part of that went to the developers who made the games? just curious.

The same amount when people sell used games on e-bay.

Don't forget Craigslist.

I don't see how they're expanding their used game business when just yesterday they were saying they no longer handle GBA games. I am glad I picked up Metroid Fusion, Castlevania: Circle of the Moon, Castlevania: Harmony of Dissonance and Castlevania: Aria of Sorrow last year.

both ebay and craiglist buy the product off of you for pennies on the dollar and sell them off at huge profits to themselves, and not simply host your listings for a small fee?

the individual doesn't try to sell his used product to earn a profit (if he can't get away with it). its to recoup the price of admission.

I get irritated because the videogame industry makes its customers out to be the bad guys and punishes us while doing nothing about their IP being sold used willy-nilly through Gamestop without seeing a cent from it. So how do they counter this? they nickle and dime their paying customers and hold content back as "DLC" <.<

their middle man is making a killing off of them and instead of dealing with it, they skip over it and punch the buyers in the face.

there is a simple fix for this, slap Gamestop with a licensing fee to sell IP's used. Gamestop can sell used games without looking like a crook. Perhaps the industry would sell me a full game at launch :O oh one can dream.

edit:

thepyrethatburns:
so what part of that went to the developers who made the games? just curious.

read bold XD

I wouldnt be so bitchy about Gamestops used game market if it wasn't for the industry stupidly doing nothing about it. Instead they saddle their paying customers with the money they lost through Gamestop by parceling their game.

You quoted the wrong thing from me. However, I would go out on a limb and say that, even if Gamestop disappeared overnight, DLC would not. It's a new revenue stream that the game companies are feasting off of even as they play the role of the poor martyr who are unfairly victimized by used game sales.

As has already been said, every industry on the planet that sells non-consumable tangibles has dealt with the used market. It is a sign of the immaturity of the game industry that they refuse to do so.

DTWolfwood:
there is a simple fix for this, slap Gamestop with a licensing fee to sell IP's used. Gamestop can sell used games without looking like a crook.

Which would work up to the point that Gamestop refused to sell any of that company's games OR hit them with a lawsuit. I'm going to go out on a limb without actually looking this up and say that, in the centuries before video games hit the market, someone probably already tried to get licensing fees from second-hand merchants. The fact that this is not a widespread practice tells me that it didn't work then so it probably wouldn't work now. Even if it did work, Gamestop would just jack up their selling point to accomodate for the licensing fee so the customer would get screwed worse.

DTWolfwood:
the individual doesn't try to sell his used product to earn a profit (if he can't get away with it).

And what if they can get away with it? Just because they are unable to pull a Gamestop (and you have no idea as a buyer whether the person bought the game for $10 and is selling it for $35) doesn't make them better or worse than Gamestop.

Also, through the wonders of legal precedent, if game companies were able to slap a licensing fee on Gamestop, do you really think that they won't do the same to resellers on Ebay or Craigslist?

http://arstechnica.com/tech-policy/news/2009/10/autocad-resale-ruling-a-messy-win-for-first-sale-doctrine.ars

Magic Eightball says "no".

Look, there's a much simpler fix which doesn't involve trying to impose your will on others.

Don't buy or sell at Gamestop. It is honestly that simple. If their practices bother you so, buy somewhere else.

DTWolfwood:
Snip

What EXACTLY is stopping anyone from using CL or Ebay again? If the game I am getting rid of is as old as dirt and not going to turn over quickly I use GS. If its something that just came out or is worth a bit on the used market I use CL/Ebay...

I use GS' used market to get games that I don't feel like bothering with online. Those are generally games that have been OOP for at least 3 years or more.

 

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