Nearly 50% of GameStop’s profits come from pre-owned sales

Three-month trading report shows record sales of $1.9 billion for videogame retailer

GameStop has released a three-month trading report, which shows a record sales for the quarter totaling $1.9 billion. It turns out that 47.4% of the videogame retailer’s profits come from sales of pre-owned games, totaling $250.2 million. Meanwhile, profits from new games sales totaled $182.4 million (21.7%), while hardware sales accounted for $21.7 million (7.9%).

"Based on brisk sales trends of new software titles and motion controller launches, we are enthusiastic about our business and have raised our full year earnings guidance,” said GameStop CEO J. Paul Raines.

But not everyone in the games industry is happy about the large profits retailers are making from pre-owned game sales as it cuts into profits for developers and publishers. Earlier this year, a Cowen and Company report showed that the average sales numbers for new games the second month after release were down from 2001 by an average of 62%. Sales figures for Final Fantasy XIII during the second month after release were cited, which showed a drop of 93% when compared to the first month of release.

Publishers have attempted to combat pre-owned sales with a variety of online related incentives. EA Sports introduced an ‘Online Pass’ system this year, which requires customers to use a one-time registration code packed with the game in order to play titles online. The incentive was meant to encourage gamers to opt for new copies in favor of slightly cheaper pre-owned ones.

Nov 19, 2010

[Source:CVG,MCV]



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