GameStop keeps the cash faucet on full blast for Q1
GameStop's CEO R. Richard Fontaine maintains a "bullish" outlook for the rest of the year. He states the company's data shows that hardware sales grew incrementally higher in 2007 than in any other year and he expects a similar performance in 2008. Fontaine maintains GameStop is well on its way to opening about 600 stores in 2008, with half those located outside the US. The company also raised its guidance for the full fiscal year to show around 30% growth over the megatons of cash it made last year. Working conditions and customer service be damned, there be money in dem dar pawnshops for stockholders!
Reader Comments (Page 1 of 1)
theturtle363 @ May 22nd 2008 2:30PM
i dont recall the ships from Independence Day being shown over New York
ballistic @ May 22nd 2008 2:55PM
then you missed one of the more stylish explosions of the movie. cause that ship destroyed the empire state building from top floor to bottom.
Esat Dedezade @ May 22nd 2008 3:36PM
I seem to remember the ship being bigger than that...
PojoMofo @ May 22nd 2008 2:32PM
its more like a cash fire hose at this point, they need some competition to keep them honest.
Lars @ May 22nd 2008 7:01PM
Well, if they'd just stop buying out competitors...
I still shop at GameCrazy over GameStop because the prices and service are better.
Erwos @ May 22nd 2008 2:44PM
$62m earnings on $1.8b revenue? I guess I'm not going to whine about their trade-in prices anymore - that kind of margin is friggin' awful.
ianoid @ May 22nd 2008 2:56PM
Gametsop ist teh suxoer!
Remember, that's after paying the CEO and opening 10,000,000,000,504 stores, each it's own little underpaid shoebox. Go Game Stop!
Korova @ May 22nd 2008 4:55PM
Yeah, thats a 3.45% net margin. That is a lot of churning for very little effect.
Stock is down 4.5% by the way, time to buy. They will have a great year, although people thought that it would be better than it actually will be. (That's stock market for you, they are like fanboys only about money)
UNC_Samurai @ May 22nd 2008 2:52PM
As of 2006, about 12%-15% of Gamestop's Sales were used, which is way more than they envisioned five years ago. In that 15% of sales, however, they are making a killing.
It's bitten the company in the ass, however. Stores are getting shafted in the product volume department because the manufacturers don't like the used sales (they get nothing). The local store struggles to keep Wii Remotes in stock while all the big box stores are overflowing.
philosophico @ May 22nd 2008 3:00PM
If it is true that they are struggling to get product, its not a shocker, the things are like a block apart from each other. Malls have 2 to 3 of them in the same mall.
Plus I know developers dont like them, instead of a kid buying a new game to go to the developers bottom line they buy a used one 10$ off a new one, thus making major profit. Dont use copy of halo 3 still go for 45$?
Farseer (GDI) @ May 22nd 2008 3:07PM
Of course the CEO "...maintains a "bullish" outlook for the rest of the year," if new game sales actually gave a bump to the company early this year, then they still haven't had a chance to really milk the used game sales on those same titles.
I'm honestly surprised that they made any money on new games, even with the awesome Q1 lineup. Pawn shops aren't really in the new game business...
phillip @ May 22nd 2008 3:14PM
man i was just in there yesterday picking up singstar (only store in area to have it at the time), i was not interested or seemded interested in anything else, and the guy could tell it, i just wanted to get out before all the sales stuff happened, almost got away, just then as i was signing the cc slip came...."would you like to pre-order anything today?" man so close, yet so far :(
Dale @ May 22nd 2008 3:44PM
I'd be interested to see how they fare once digital distribution is the norm. Who is going to go to GameStop.com when there are better, cheaper virtual stores like Steam, Greenhouse, and the like?
Sir Fidlious Wong (Justin T. McElroy Memorial Burn of the Day Award) @ May 22nd 2008 3:47PM
"GameStop's CEO R. Richard Fontaine"
Really? Is that a Bioshock Reference? Am I the first to notice it?
Will B @ May 22nd 2008 4:24PM
Ah, Gamestop.. they make plenty of money, but If you work there, your salary goes something like this
Base = Minimum wage..
You speak 2 languages? Base + 15 cents/hour
4 year degree? Base + 10 cents/hour
10 years retail experience? Base + 10 cents/hour
I quit the day that memo came out. I was making $10/hour, and they said I had to make less and to check off this list. In retrospect, I should have wiped my A$$ with the memo before quitting.
corchadog @ May 22nd 2008 5:30PM
BUY FROM GAMECRAZY!!!!
mrz3r0 @ May 23rd 2008 10:00AM
Due to the ease of its location, I started buying games from GS that is 20 seconds from my house in a new strip mall that opened. Here is what I have learned or assessed from going there (and from other locations as well):
1.) If you know anything about gaming/games, you should not be allowed to work at Gamestop. This may not make sense to you, but it does to a person that doesn't want to sit behind someone for 15 damn minutes and listen to them drool back and forth with the employee about the latest and greatest of whatever. Ring me up, shut the hell up, and get me out of the store.
2.) The price of used games at GS, is out of control. I stopped in at a local Target to look at PSP games. They had a couple I wanted at $14.99, but I decided to just hit GS on the way back home and get the used ones cheaper. Nope. I got to GS and they had all the games anywhere from $3.00-$6.00 higher...USED, than they were new. I asked the clerk working if they would price match the used games to save me a trip back. She said, and I quote "No we can't because the return policy is just the same as a new game." I stared at her for what must have been 2 minutes hoping she would realize how stupid she just sounded. I said "I can go buy the new ones cheaper, and have the same return policy, from another store. I am asking you, if you could match the price to a.) save me a trip and b.) get some money in this stores already fat pockets". She did not seem to understand the problem with the situation. Which leads me to my next point.
3.) The people that work at Gamestop, and I am going to go on a limb and say...90% of the employees, are all morons. We have two in my city, and I have been to at least 40+ across the US in my travels over the last year, and at each store, almost always a moron behind the counter. Now this could be true anywhere you go, and it usually is, but the monosyllabic vernacular of the employees of GS is amazing. I am sure there are rare cases where a potential Nobel Prize winning physicist is working behind the counter, but that is just as rare as winning the Nobel Prize.
4.) Anyone else want to punch the clerk in the face when they try and sell you on anything from a reserve, pre-order, or peripheral? I understand the "upsell and make a sale" moto that these stores push but this is the ONLY store I have ever been too where 5 minutes is wasted during the "I give you money you give me game" transaction for "Did you reserve Madden yet? Do you want to?"; "Have you checked out the new wireless headset and doodad that attaches to your heart and kills you for real when you die in game?".. seriously, stop it. I have never had a time where I went into a GS and didn't get the run-down. (I know there are forums dedicated to this rant).
What is really bad about the push concept, is that it negates a lot of games that don't get the push. Games that are great and looked over because the pockets of the company that made it were not big enough to grease the hand of Gamestop to push their game. That is just sad..
5.) Unless someone steps up, and I mean another company, and attempts to dethrone GS as the be all, end all, gaming store for the masses, it is only going to get worst. The prices are going to climb in their stores, the employees are going to get even worse. I mean think about what they pay people..only dipshits and mongrels are going to want to work for that kind of pay. The pushes are going to get out of hand, and the library of games is going to suffer from it.
Kino @ Jun 23rd 2008 10:04PM
Why didn't you just call the GS instead of driving over there to see it? Phone calls are much cheaper than gas, and boy, that would have saved you the trip.
I think that most of the people behind the counters appear to be morons because they are tired of dealing with the 90% idiot customer base they have to pander to: Moms, grandparents, idiot teenagers who think the wii is the best thing ever because they've NEVER played anything else. I've found that most of the employees are smarter than the people they sell stuff to.
And y'know, it's not hard to say no to a reserve. I mean, a) the people behind the counter are judged by those numbers and you saying no to preordering a game that your stupid ass is going to buy anyways hurts them, and b) what are you REALLY losing? "Oh, no, I don't want to knock off some of the price of this game I want to buy when it comes out AND be sure I get a copy because developers are shipping less and less to this store because of it's used sales because I am an elitist bastard".
You being a dick to these people gets them yelled at by their managers, which makes a poorly-paying job worse by dealing with bad customers while trying to remain as friendly as possible.
Y2M @ May 23rd 2008 7:05PM
"Would you like Fries with that?"
Everyone knows what it means - that McDonalds is trying to get an add on transaction to help make it more money. Why does only GameStop get blasted for their versions of this? (i.e. trades, reserves, et al)
If you go out to eat, did your waitress ask if you wanted an appetizer or desert? She's trying to upsell you!
If you buy most anything from Best Buy, did the salesman try to offer an extended warranty? He's trying to upsell you!
If you go to get your car repaired, did the mechanic find something that could be wrong that he recommends you fix? He's trying to upsell you!
If you go to GameStop, did you get offered a reserve? He's trying to upsell you!
It's a common business practice. Every retail company I've been with advocates the rule of three - get three "No" answers before you stop offering add-ons.
Reserves. Trades. Game Informer.
So again. Why does only GameStop get this hate? Please - educate me!
theNotoriousBEN @ May 26th 2008 7:59PM
Gamestop gets the hate 'cuz this is a game blog and EVERYONE hates getting upsold. If we were reading a restauranteur blog we'd be hating on the "would you like an appetizer" line just as much as the "preorder" line.
Maybe not, but just my theory.