2.3 million people waiting for PS4 stock – Gamestop

Sell-through of new console already 80% higher than total number of PS3’s sold in 2006 fiscal year; Xbox One tracking 15% higher than Xbox 360 launch year

GameStop sold through its entire stock of PlayStation 4 systems as well as an extra allocation from Sony, and it still has 2.3 million people left on its “first to know” mailing list for the system. Executives with the specialty retailer updated investors of the console’s early performance in a post-earnings conference call this morning.

Joking that “It’s all about the consoles, stupid,” GameStop officers rolled through some of the early results from the PS4 launch. CFO Robert Lloyd said the company was pleased with tie ratios on PS4 goods, but declined to go into any specific numbers. As for what sold particularly well, GameStop president Tony Bartel said that PlayStation Plus subscriptions (which included two free downloadable PS4 games–Resogun and Contrast) proved to be particularly popular.

“When you look at all of the PlayStation Plus subscriptions we’ve sold in our lifetime, and we’ve been selling them for years, a full one-third of all the subscriptions we’ve sold in our lifetime were sold in the last seven days,” Bartel said.

That sort of digital goods attach rate is becoming big business for GameStop. Elsewhere in the call, the executives confirmed that internationally, customers who picked up Batman: Arkham Origins also bought the game’s season pass DLC from GameStop more than 30 percent of the time.

As for the PS4 hardware itself, the company has sold 80 percent more PS4s in one week than the total number of PS3s it sold in its 2006 fiscal year. The Xbox One also appears to be outpacing its predecessor, as GameStop’s current number of reserved systems plus its additional allocation from Microsoft already exceeds the number of Xbox 360s sold in its fiscal 2005 by 15 percent.



GameStop exec blames console decline on lack of innovation

Tony Bartel says last generation lasted far too long, predicts PS4, Xbox One to spur 30% growth in console market next year.

GameStop is gearing up for next month’s launches of the PlayStation 4 and Xbox One, as the retailer’s president Tony Bartel made abundantly clear during a session today at the GamesBeat 2013 conference. Bartel said the company has filled all of its launch allocations for both systems, and has millions of customers on waiting lists to find out when new lots will be made available.

As for how he reconciles the enthusiasm and demand for the new systems with the doom and gloom surrounding the console market in recent years, Bartel suggested the two are related.

“There’s been nine straight quarters of negative growth in the videogame sector,” Bartel said. “I think what you’ve seen is a consistent decline, and I think it’s due to lack of innovation. I mean, how many people in the crowd today have a cell phone in your pocket that’s more than five years old?…There’s nothing that’s that old that’s around, really, but that’s what we’re doing with consoles.”

The new consoles represent a long overdue dose of innovation into the market, Bartel said, and one he believes will produce instant results. GameStop’s internal predictions have the console market growing 20-30 percent next year, with another 10-15 percent after that, he added.

As for which company he expects to come out of the holidays ahead in the latest round of console wars, Bartel gave the nod to whichever company was able to produce the most systems.

“I will tell you right now that we are going to sell every single piece that they will give us,” Bartel said, adding, “There’s tremendous demand out there for the consoles, so that will depend on who gets more shipped in.”



I Sold Too Many Copies of GTA V To Parents Who Didn’t Give a Damn


Dear Parents… We need to talk. There is something that has been eating at me for awhile, and I have had enough.P

I have been working in video game retail for almost 10 years now. I love my job. Some of my best memories begin with loving, bewildered parents walking into our store, naïve to the gaming world but eager to learn. I would find myself talking to them about platform choices, game franchises, and getting started online. I’d then enlighten them with my own gaming experiences with my kids. This approach got them interested in what their children were doing and encouraged them to play the games alongside their kids.P

There is no better feeling than a happy parent returning to my store, pleased with my previous advice, and wanting more product.P

So, when a new MarioLittleBigPlanetPokémon, or any kid-friendly game comes out…

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New Playstation, New Xbox One Are Coming, and Gamestop Wins

GameStop (GME), having survived a brutal nine quarters without much in the way of new video-game products on aging platforms, is about to power up on two new video-game consoles and two major releases from popular franchises.

The Texas-based retailer expects a major boost from the fourth iteration of Sony’s (SNE) Playstation, due in mid-November, and Microsoft’s (MSFT) new Xbox One, expected to hit shelves around the same time. Before the next-generation devices arrive, there’s likely to be a final retail hurrah for new games on the old machines as the hit franchises Grand Theft Auto 5 and Battlefield 4 hit the shelves over the next two months.

“There are no other retailers on the planet that are prepared for this kind of opportunity,” GameStop Chief Executive Officer Paul Raines bragged to investors about the coming of the new consoles. The company expects profit in the coming quarter to be up to 45 percent than its haul in the year-earlier period. If history is any guide, GameStop is in for a wild ride.

The last Xbox iteration, released in November 2005, came as rocket-fuel for GameStop. The company’s market value had already grown by almost 50 percent by the time Playstation 3 was released a year later; in the following 12 months its share price doubled. The company appears to be in an even better position to take advantage of the gaming cycle this time around. Its share of the video-game retail market has grown from about 15 percent to roughly a quarter, according to Piper Jaffray analyst Michael Olson. The number of stores worldwide has grown by nearly half since the debut of the last Xbox, with more than 2,100 new locations opening, primarily in North America, from 2005 to 2012 for a total that tops now 6,500.

GameStop made those gains by carefully cultivating a community of hardcore gamers. In 2010, GameStop launched its “PowerUp” loyalty rewards program, which now has about 25 million members. That vocal GameStop constituency proved a powerful force in blocking manufacturers from switching to download-only sales or any other changes that might limit the massive second-hand market for games, which remains GameStop’s great strength. Customers are more willing to buy a new game at full price if they know they can sell it back and recoup at least some of their investment.

What’s more, GameStop has deepened its ties with game publishers, allowing it to lock up inventory in advance, collect cooperative advertising dollars, and orchestrate release parties at its brick-and-mortar stores. The company has also said it will get bigger console allocations from both Microsoft and Sony this time around, which can prove a major driver of foot traffic in the early days, when inventories are scarce.

The big console launches also promise a flurry of trade-in activity as consumers swap old games and hardware and exchange new purchases they aren’t keen on. GameStop collects almost 40 percent of its revenue by selling used games and gear, a business with a powerful 47 percent gross profit margin. That’s roughly double what the company  squeezes out of selling new gaming hardware and software. In 2007, just after the Playstation 3 hit shelves, GameStop’s pre-owned business surged by 20 percent.

“We compete on the value dimension,” Raines recently told investors. “We compete based off trades. We don’t compete based off discounting.”

In other words, GameStop is going to get video-game fanatics without having to mark down merchandise. Amazon (AMZN), Target (TGT) and other big electronics retailers may not have that kind of power.


Can “Grand Theft Auto V” Save the Video-Game Industry?

Shares of Take-Two Interactive (NASDAQ: TTWO  ) hit a fresh 52-week high this week, and it’s not necessarily the past that has investors excited. Shares of the Rockstar Games parent have nearly doubled over the past year in anticipation of next month’s release of Grand Theft Auto V.

It’s easy to see why the market’s excited. More than five years have passed since Grand Theft Auto IV set initial sales records. The industry itself has gone into a tailspin in that time, as social and casual games on smartphones, tablets, and social-networking websites have eaten into the industry’s revenue.

Diehard gamers are still there. There’s no joy in Candy Crush Saga or Plants vs. Zombies for them. However, they have been fewer in number, as hardware and disc-based software sales have fallen every year since 2009.

Thankfully for Take-Two, the trend in recent years has been for gamers to ignore all but the marquee releases. Despite dwindling sales for the industry overall, Activision Blizzard‘s (NASDAQ: ATVI  ) annual Call of Duty installments continue to set new records.

That’s good news as the market’s bracing for the Sept. 17 release date of the gritty title.


Source: Rockstar Games.

How big will the game be? Well, GameStop (NYSE: GME  ) delighted investors on Thursday by forecasting an 11% to 15% spike in store-level comps this quarter. Grand Theft Auto V is the quarter’s big release, as Call of Duty: Ghosts as well as the potentially game-changing release of the Xbox One and PS4 consoles won’t take place until November.

GameStop has posted nine consecutive quarters of negative comps, and it’s banking on Take-Two’s release to turn that around.

“I can’t clarify exactly what the impact on the comp is of Grand Theft Auto V, but obviously, it’s going to be a huge title,” GameStop’s CFO noted in Thursday morning’s earnings call, also pointing out that it will be the only U.S. retailer that will be selling a $150 collectors’ edition.

Surely there’s some irony in shelling out $150 for a collectible version of a game about living a life of crime.

There will be less drama surrounding Take-Two itself than there was when Grand Theft Auto IV was released in April 2008. Electronic Arts (NASDAQ: EA  ) made several offers to buy out Take-Two in the months preceding and following that game’s release, and shareholders rebuffed EA’s advances every time. There doesn’t appear to be a repeat performance out of EA this time around.

Take-Two continues to trade well below EA’s original offer to cash out investors at $26 a pop, but you won’t find too many newer shareholders complaining about a stock that opened at a new high on Friday morning, 89% ahead of where it was a year earlier.

The game’s afoot, and that foot just happens to be on the accelerator.