Video game retailer GameStop reports record sales and earnings for first quarter 2009, with a slight drop in new game sales bolstered by a significant rise in used products.
Despite the unstable economy, GameStop once again delivers a report indicating record sales and earnings to their doubtlessly overjoyed shareholders. Sales were up 9.2% compared to this time last year, with $US1.98 billion dollars worth of product passed to consumers. Net earnings were up 13.4%, rising to $US70.4 million from last year's $US62.1 million.
Great news for GameStop, though not so good for the games industry as a whole, as new game sales declined and used games jumped significantly.
"During the quarter GameStop sustained its strong earnings growth momentum and exceeded earnings guidance despite less than planned comparable store sales," indicated Daniel DeMatteo, CEO of GameStop. "Although new video game software sales declined by 2.8%, lower-priced used products grew a robust 31.9%, illustrating that value is becoming more important to our customers.
So yes, great for GameStop, which receives the full benefit of used sales, but not so good for companies releasing new games to the market. Of course it's been a little slow for new games this year so far, and DeMatteo expect things to pick up as the year rolls on.
"In the second quarter, like the first, we face very strong comparisons to the prior year period due to the unprecedented number of blockbuster titles released in the first half of 2008 and a significantly more brittle global economy. We do expect the back half of this year to be stronger than the first half due to a full and wide-ranging new title lineup. All together, this places us in a prime position to capitalise on the growth in the market in the fall and holiday seasons."