QUOTE AND NEWS
Benzinga  10 hrs ago  Comment 
In a report published Tuesday, Pacific Crest analyst Evan Wilson released pre-earnings coverage on GameStop (NYSE: GME) before the retailer's Q2 earnings after Thursday's market close. Analysts at Pacific Crest hold high expectations on...
Wall Street Journal  Aug 19  Comment 
GameStop said its chief executive, Paul Raines, had a cancerous tumor removed from his brain last week and the company's executive team would help oversee operations while he recovers.
StreetInsider.com  Aug 19  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/GameStop+%28GME%29+Issues+Statement+on+Medical+Condition+of+CEO+Raines/9765929.html for the full story.
SeekingAlpha  Aug 19  Comment 
By Daniel Jones: After the market closes on Aug. 21, GameStop (NYSE:GME) is expected to report revenue and earnings for the second quarter of its 2014 fiscal year. Despite high expectations from analysts, shares of the specialty retailer are...
Motley Fool  Aug 18  Comment 
After posting a great 2013, GameStop's stock is struggling right now. Here's how the shares could recover and move higher over time.
SeekingAlpha  Aug 18  Comment 
By Derek Capo: Since 2010, I have owned stock in GameStop GME on the thesis that the company would not be destroyed by digital distribution or larger electronic retailers entering the used game business. For years, I looked like a fool holding as...
SeekingAlpha  Aug 18  Comment 
By Jason Ditz: Last week's reports of surging sales of Sony's (NYSE:SNE) PlayStation 4 are a great sign for the video game industry. Pessimism about the new generation of hardware is a distant memory now, with PlayStation 4 selling 10 million...
TheStreet.com  Aug 18  Comment 
Story updated at 9:50 a.m. to reflect market activity. NEW YORK (TheStreet) --aBenchmark lowered its price target for GameStop GME to $33 from $34.71 Monday, reiterating its "hold" rating for the stock. Shares of GameStop gained 1.1% to $40.09...
SeekingAlpha  Aug 15  Comment 
By Jeffrey Himelson: NPD Group recently announced that video game sales in physical retailers fell 15% y/y in July. Moreover, the report stated that total hardware sales in July were double that figure in 2013. Hardware spending during July...
Market Intelligence Center  Aug 14  Comment 
MarketIntelligenceCenter.com’s patented option-trade picking algorithm found two trade ideas on GameStop Corp. (GME) today after it traded between between $40.42 and $41.37 before closing at $41.34 on Wednesday. For more conservative investors,...




 
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]

Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki