QUOTE AND NEWS
SeekingAlpha  Sep 17  Comment 
By Gloves Off Investing: GameStop (NYSE:GME) has benefited this year from the introduction of the next generation of video game consoles, Sony's PlayStation 4 and Microsoft's Xbox One (NASDAQ:MSFT). However, software sales are weak, and we are...
MedPage Today  Sep 15  Comment 
WASHINGTON (MedPage Today) -- Graduate medical education should mostly take place in the community -- where Americans get most of their care -- rather than in hospitals, the American Academy of Family Physicians urged Monday.
Wall Street Journal  Sep 15  Comment 
Electronics and software retailer GameStop Corp. plans to exit the Spanish market by selling some of its retail stores to Game Digital PLC and closing its remaining stores in the country.
newratings.com  Sep 15  Comment 
Benzinga  Sep 12  Comment 
In a report published Friday, Bank of America analyst Curtis Nagle reiterated a Buy rating and $56.00 price target on GameStop Corp. (NYSE: GME). In the report, Bank of America noted, “NPD reported that US software sales in August decreased...
MedPage Today  Sep 11  Comment 
WASHINGTON (MedPage Today) -- Allowing Medicare to use its budget to pay for education not directly related to treating Medicare beneficiaries is a bad idea, according to a former administrator of what is now the Centers for Medicare and Medicaid...
Forbes  Sep 10  Comment 
Say what you want about Nintendo's messaging or their baffling console naming conventions, but the company continues to master the art of pulling at our nostalgia heartstrings. Exhibit A: This new NES Edition 3DS XL, inspired by the iconic...
StreetInsider.com  Sep 10  Comment 
Visit StreetInsider.com at http://www.streetinsider.com/Corporate+News/GameStop+%28GME%29%2C+Alliance+Data+%28ADS%29+Debut+Branded%2C+Private-Label+Credit+Card/9820367.html for the full story.
SeekingAlpha  Sep 9  Comment 
By Jordan Lund: GameStop (NYSE:GME) recently reported blowout 2Q earnings. As previous reviews on this website have discussed, every major category including digital revenue, software sales, and their pre-owned segment experienced year over year...
SeekingAlpha  Sep 8  Comment 
By Critical Timing: Investors have generally been shunning brick and mortar gaming and entertainment product companies such as GameStop (NYSE:GME) and Outerwall (NASDAQ:OUTR) due to fears that prevailing industry trends such as the rising...




 
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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