Forbes  Nov 4  Comment 
This might be the first year I could wholeheartedly recommend gamers upgrade to either a PS4 or an Xbox One. This generation of consoles has gone through the usual early cycle blues, with games like Titanfall and Watch Dogs actually serving...
Market Intelligence Center  Oct 30  Comment 
After closing Thursday at $45.71, GameStop Corp. (GME) presents an attractive opportunity to get a 8.27% return in just 77 days, which is an annualized return of 39.20% (for comparison purposes only). To enter this trade, sell one Jan. '16 $47.00...
Market Intelligence Center  Oct 22  Comment 
GameStop Corp. (GME) is an excellent choice for either a diagonal spread or a covered call expiring in Dec. '15 at the $47.00 level according to MarketIntelligenceCenter.com’s patented algorithms. A covered call on GameStop for a net debit of...
Benzinga  Oct 20  Comment 
In a report issued Monday, analysts at Stifel shared their thoughts about September’s NPD data and their impact on GameStop Corp. (NYSE: GME). The experts assured they are awaiting an October acceleration. Shares of GameStop are up more than 1...
Forbes  Oct 16  Comment 
Among the underlying components of the S&P 500 index, we saw noteworthy options trading volume today in GameStop Corp (NYSE: GME), where a total of 7,959 contracts have traded so far, representing approximately 795,900 underlying shares. That...
SeekingAlpha  Oct 7  Comment 
Forbes  Oct 7  Comment 
I don’t know what kind of black magic deal GameStop has made with the devil to retain its place as a relevant brick-and-mortar store in this digital age, but whatever they’re doing, it’s working.
Market Intelligence Center  Oct 7  Comment 
GameStop Corp. (GME) is a good candidate for a covered call at the $44.00 level. The Jan. '16 call at that price should fetch a credit of about $2.70, which means the entire position has a net debit of about $40.64. This trade has 5.28% downside...
Forbes  Oct 1  Comment 
A while back, I traded in my Xbox 360 and all its games to GameStop. The 360 would not connect to Xbox Live anymore no matter what I did, and I was a few months into owning an Xbox One, and found little use for the old system.


GameStop (NYSE:GME) is the world's largest retailer of video game hardware and software. The company has saturated U.S. mall locations, and is now expanding into strip centers and international locations to drive store growth. In addition to its size, Game Stop differentiates itself from its competitors by carrying one of the largest assortments of used video games. The used business is important to GameStop, as used games are more profitable, with 46.8% margins vs. 21.3% for new games.[1] The company earned $9 billion in net sales and $376 million in net income in 2009.[2]

Like other video game retailers, the company is also dependent on new console releases to drive software and accessory sales. The three main video game consoles in the market are Sony (SNE)'s Playstation 3, Microsoft (MSFT)'s Xbox 360 and Nintendo (NTDOY)'s Wii (see Game Consoles Wars: Xbox 360 vs. PS3 vs. Wii), which are nearing the end of their cycles. Retailers, like GameStop, will be much more successful in the middle of cycles and will generally fare worse in between cycles.

Company Overview

Gamestop operates 6,450 stores in the United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games. The company also operates electronic commerce Web sites, including www.gamestop.com, and publishes Game Informer, the industry’s largest multi-platform video game magazine in the United States based on circulation, with approximately 4.0 million subscribers.[3]


  • New Video Game Hardware - 19.3% of net sales, 6.5% of gross profit
  • New Video Game Software - 41.1% of net sales, 21.3% of gross profit
  • Used Video Game Products - 13.2% of net sales, 46.8% of gross profit
  • Other - 13.2% of net sales, 33.8% of gross profit (other products include PC entertainment and other software, accessories, and magazines)

Key Trends and Forces

Increasing Popularity of Video Games

The Entertainment Software Association (“ESA”) estimates that 65% of all American households play video or computer games.[4] With the evolution of technology providing a more realistic playing environment and the creation of family friendly game consoles like the Nintendo Wii, video games are more popular than ever. Additionally, video games can also be more than just about the games -- the Wii Fit Plus combines fitness with gaming and is geared to people of all ages. The increasing popularity of these kinds of games means a higher demand for video games, and a better bottom line for Gamestop.

The Video Game Industry is Very Cyclical

Video game producers and retailers are extremely dependent on new video game hardware to drive business. The main video game consoles are Sony (SNE)'s Playstation 3, Microsoft (MSFT)'s Xbox 360 and Nintendo (NTDOY)'s Wii (see Game Consoles Wars: Xbox 360 vs. PS3 vs. Wii), all of which are nearing the end of their. Hardware sales are usually greatest in the third year of a cycle, and software sales are greatest in the fifth year. Gamestop will look to capitalize on rising software sales rather than hardware sales as these systems mature.

Expanding Target Market

In the late 1970's when video games were first created, the average age of a gamer was ten years old. The average age of a gamer today is 13 years old, according to the Entertainment Software Association. In addition, 25 percent of Americans over the age of 50 play video games on a regular basis. More and more people are spending money on video game hardware and software, which benefits the entire industry. Also, young children are spending more time playing video games, and less time with traditional toys and games. More video game players means more people buying Gamestop's products.[4] dss

Female Video Game Use

Video games have traditionally been a male-dominated market, but the number of female gamers has grown significantly. In 2009 40% of video game users were female. However, most of these female gamers are casual gamers who play card, word, and puzzle games online. These typically older women are not buying video game hardware and software.[4]

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