QUOTE AND NEWS
SeekingAlpha  Aug 11  Comment 
By Chris Katje: Over a year and a half has passed since I wrote on video game retailer Gamestop (NYSE:GME) on Seeking Alpha. Since that time, the chain has been a constant target of retail worries with analysts and investors predicting the...
StreetInsider.com  Aug 11  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/GameStop+%28GME%29+Reports+Streamlined+Trade-in+Program/9740566.html for the full story.
SeekingAlpha  Aug 8  Comment 
ByMarshall Hargrave: The private equity industry has some $1 trillion available to invest. The retail industry could be just the spot for it. Barron's noted that the retail sector has been hit unusually hard, and as a result many operators within...
DailyFinance  Aug 6  Comment 
GameStop, a family of specialty retail brands that makes the most popular technologies affordable and simple, is offering the public and PowerUp Rewards™ members the opportunity to experience more than 300,000 square feet of...
Forbes  Aug 5  Comment 
According to an internal memo obtained by Kotaku, GameStop is about to simplify their trade-in policies, offering more money for games with less confusing options for trades.
MedPage Today  Aug 2  Comment 
(MedPage Today) -- "It is my belief that it is no longer possible to fully train family physicians in 3 years and that we should extend the training time to 4 years."
MedPage Today  Aug 1  Comment 
(MedPage Today) -- Do you think medical residents today are less prepared than they used to be, and what reforms would you want for government funding and oversight of physician education?
SeekingAlpha  Jul 31  Comment 
By Lutz Muller: Video game retail sales in the U.S. have been in the doldrums ever since they hit a high point back in 2009. However, this was then easily explained. Everybody was waiting for the new consoles to come out in 2012 and 2013 and did...
SeekingAlpha  Jul 31  Comment 
By Jeffrey Himelson: Yesterday, Microsoft (NASDAQ:MSFT) and Electronic Arts (NASDAQ:EA) reached a partnership regarding Xbox One that paints a negative outlook for GameStop (NYSE:GME). The partnership, which will run exclusively on Xbox One, will...
Cloud Computing  Jul 30  Comment 
GameStop (NYSE: GME), a family of specialty retail brands that makes consumers' favorite technologies affordable and simple, announced today that its GameStop Technology Institute (GTI) business unit has entered into strategic...




 
TOP CONTRIBUTORS

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]

Products[1]

  • 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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