GameStop Sees First Holiday Revenue Dip Since 2005

[MikeWehner]

GameStop Sees First Holiday Revenue Dip Since 2005

GameStop declares Wii U launch a success, but has a disappointing 2012 overall.

At the end of 2012, videogame retailer and reseller GameStop saw its seven-year holiday sales hot streak end, according to new data revealed by the company. This marks the first time since GameStop's merger with Electronics Boutique that the company didn't improve on its year-over-year holiday revenue. GameStop brought in approximately $2.88 billion, marking a 4.6% decrease from 2011.

The holiday dip marked the end of a disappointing year for the company, which noted in its financial report that its pre-owned game offerings saw a 15.6% decline in sales for the year. GameStop attributes the pre-owned sales woes to "limited inventory due to fewer new titles released throughout 2012 and less promotional activity."

One bright spot on the company's otherwise dull 2012 report was the launch of the Wii U. The report calls the launch "successful" and notes that it was responsible for the sale of 320,000 Wii U units worldwide.

Source: Joystiq [http://www.businesswire.com/news/home/20130108005484/en/GameStop-Reports-2012-Holiday-Sales-Results]

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[punipunipyo]

It's called steam, they have better offers, AND they support Indies, GS only wants to be a pawn shop, and their ver. of steam sux!~yes, I bought my Borderlands 2 Season pass from them, and it bites donkey's butt!

 

[Therumancer]

Well, I think Gamestop's problem has largely been not being as competitive as it once was. While your seeing increasing pressure by companies to find ways to cut them out of the picture and nail their used games business (as well as force digital by just making packaged games connections to some digital distribution service when it comes to the PC in paticular), Gamestop has pretty much worked to ensure it remain as expensive as it always has been. Basically I can walk into Gamestop and buy a game for the "standard retail price", in comparison if I order it via Amazon I usually get a few bucks off as well as not having to pay taxes on the product. Then we also have STEAM and it's holiday sales where it sells games at a DEEP discount, including some that are only a couple of months old.

I think a big part of Gamestop's problem is that it's not adapting it's business model, people as a whole learn slowly, but after 7 years they are beginning to realize there are far better options than buying from Gamestop.

I think part of Gamestop's problem is also the whole "OMG, we only made close to 3 billion dollars, pity us" okay granted that's a 4.6% decrease, but so what? I don't think constant growth is needed to be considered a success (rather making more than you spend is), and that kind of corperate attitude is a big part of what's destroying society. I'm sorry, but I just can't bring myself to feel sorry for these guys. To be honest they made more money than they probably deserve with their business model nowadays.

If Gamestop wants to compete, especially when it comes to holiday times, it's going to need to engage in the same practice of a lot of it's comeptition like STEAM: Deep Discounts, and trying to make up the differance with volume sales. This is especially true when it comes to their used games which oftentimes are only a couple of bucks cheaper than retail and might be missing core content due to all the "Project $10" type garbage.

I find it funny how I know there have been local gamestops that have literally had employees build forts out of used games for fairly recent titles that were played and then turned in, yet gamestop still insists on trying to sell them for like $5 below retail, when with their fairly low trade in values (especially nowadays) they could still undercut by $20 or more in some cases and make a profit.

As I said, bad business model that hasn't been adapting. Of course I suppose we should expect this, businesses have always been reluctant to change and adapt, holding onto failing and obselete practices as their competition forces them into extinction. I've read stuff about how one of the reason why Wal*Mart dominated over other chains was that they were un-willing to change their bussines models to compete even though they had the abillities and connections to do so, and I do see some parallels to how Gamestop, Best Buy, etc... are currently doing. Both Gamestop and Best Buy for example think that not carrying Kindles is a "solution" to getting cremed by Amazon, when really at it's core, that's not the problem.

 

[redknightalex]

Is there not an idea in economic theory that continual growth cannot be sustained by a corporation? At some point you'll have reached your max, for whatever reason, and the only way to go is down. Sustained growth cannot actually be sustained and all companies who try to keep growing will eventually be disappointed. Or something like that, I think.

Either way, although I don't harbor as much hate as others do for GameStop (it's the only way I can buy video games off-line), but I also don't feel and for them or those that own stock in the company. Retail sales of hard-disc games is slowly being driven into the ground, and not by used games. It's a little something called Steam and their amazing interface (plus sales!).

 

[AzrealMaximillion]

Is there not an idea in economic theory that continual growth cannot be sustained by a corporation? At some point you'll have reached your max, for whatever reason, and the only way to go is down. Sustained growth cannot actually be sustained and all companies who try to keep growing will eventually be disappointed. Or something like that, I think.

Either way, although I don't harbor as much hate as others do for GameStop (it's the only way I can buy video games off-line), but I also don't feel and for them or those that own stock in the company. Retail sales of hard-disc games is slowly being driven into the ground, and not by used games. It's a little something called Steam and their amazing interface (plus sales!).

I think another reason that helps online video game sales is that you're able to find old classics with ease and for cheap more readily. Won't find a copy of FF7 at a GameStop. Won't find a really cheap hard copy anywhere really. But for $13 for a digital PC version? Why not?

 

[Artemis923]

I've been going to Bookman's lately, and just picked up Diablo for the PS1.

Won't find that at Gamestop. Fuck 'em.

 

[sneakypenguin]

I kinda think it would be cause theres nothing exciting in the console space atm, no big game releases outside halo4 and cod, ps3 and 360 are on their last legs so of course sales would probably be down. Happens over a product life cycle in pretty much anything, gamestop is just based on the one product so as the consoles and their software go, so do they.

 

[MikeWehner]

I don't know about the rest of you, but I buy more games from Amazon during the holidays than from any other outlet in the entire rest of the year, combined. I have stacks of unopened games that I picked up for half price or less. No reason to go anywhere else, really, at least during the holidays.

 

[Reyalsfeihc]

Hmmm... maybe it's because the next major console generation is right on the horizon?

No... that can't be it.

 

[Yopaz]

I don't know about the rest of you, but I buy more games from Amazon during the holidays than from any other outlet in the entire rest of the year, combined. I have stacks of unopened games that I picked up for half price or less. No reason to go anywhere else, really, at least during the holidays.

Yeah, I buy a lot of games from Amazon.co.uk and when they are sending games abroad they have to deduct 20% because VAT doesn't apply when selling something to customers abroad.

I also find Gamestop's prices to be among the highest there is. I am usually able to get both better selection and better prices from an electronics store, often getting new games there far cheaper new than GameStop's used.