GameStop Says Wii Fit 'Significant' for Wii Adoption; 'Sufficiently Happy' with PS3 S

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GameStop Says Wii Fit 'Significant' for Wii Adoption; 'Sufficiently Happy' with PS3 Sales
GameStop said Wii supply is up 15 percent but Wii Fit will attract even more demand. Also the company is pleased with PS3 sales and foresees possible 360 price cuts outside Europe.
Posted by James Brightman on Thursday, May 22, 2008


In response to a recent comment by SCE chief Kaz Hirai who noted that Sony had no plans to cut prices on PS3, GameStop COO Dan DeMatteo said on the earnings conference call, "...the truth of the matter is that we have been sufficiently happy with the rate of sale on the PS3 at its current price points, [and] assuming it continues at that rate we'd be just fine holding the price. If it shows any sign of weakening or if they decide to make a move to get more market share, I still think that option is open. But right now we're ok with [Hirai's] announcement."

Later in the Q&A session, after an analyst joked earlier that the GameStop execs would all be a bit lighter thanks to Wii Fit, CEO Dick Fontaine added that he "feels pretty damn strongly that Wii Fit itself is probably going to be the most significant addition that will drive new hardware sales."

He continued, "I think as more and more people see this... I think it's going to drive even more demand for the Wii. While we've been selling out everything that we get, I think this is going to add even more stimulus for demand that's going to run throughout the year... I give credit to Nintendo; it's a brilliant time to add on another accessory that really attracts a large number of new users... It's win-win all the way around as long as we can get the supply that we need."

Responding to an analyst who noted that Wii supply did seem to go up a little, DeMatteo stated that Wii hardware went up "about 15 percent" a month ago, "but supply still can't get caught up with demand."

Finally, regarding the Xbox 360 Fontaine noted that the recent price drops in Europe made a big impact on sales and "that may be a harbinger of what they want to do in other markets downstream from Europe," possibly hinting at future North American price cuts later in the year.

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GameStop: We Aren't Ignoring the Recession; We Don't Have Our 'Head in the Sand'
GameStop has been one of the biggest beneficiaries of the video game boom, but CEO Richard Fontaine says his company isn't blind to the current economic environment.
Posted by James Brightman on Thursday, May 22, 2008


Speaking on GameStop's earnings call after the record Q1 results, CEO Dick Fontaine assured investors and analysts that GameStop knows it needs to pay attention to the recession environment even though it's not been impacted by it thus far.

"We're well aware that the macroeconomics are making this a very challenging time for many retailers and while GameStop is dramatically running counter to that trend, I want to assure you that we don't have our head in the sand and don't take our strong sales and profits for granted. We continue to evaluate our business at the micro level to determine if there is any underlying weakness affecting GameStop and we do so in a number of ways."

Fontaine noted that GameStop continually evaluates key title sales or "any of the key titles not quite living up to expectations" and adjusts accordingly. Furthermore, the company continues to look at the "tertiary store impact," meaning the smaller stores with a wider trade area, which are being "hammered by $4.00 gas." Fontaine said that the fuel pricing has led to a cutback on driving to these mall strips or shopping centers anchored by Target or Wal-Mart or supermarkets. Interestingly, however, he said, "Our tertiary [locations] are some of the best performers year-to-date."

Fontaine said GameStop evaluates store performance at the market and macro level and "comps in every market are strong." He did acknowledge that Southern California and South Florida are two regions where GameStop "may be seeing some slight [impact from the recession] though it's very minor at this time."

Photo credit: Thanks to Dallas Morning News

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GameStop: Current Console Cycle Will Be Deeper than Any Other
With core gamers rabidly picking up games like GTA IV and Super Smash Bros. Brawl and the audience still broadening, GameStop is very optimistic. Wii Fit is also "blowing off shelves," the retailer said.
Posted by James Brightman on Thursday, May 22, 2008


Following GameStop's impressive first quarter results, the retailer held a conference call to talk about its growth and the changing landscape of the game industry.

CEO Dick Fontaine said he expects this current console to be unlike any before it. "In previous quarters we've made the case that many of the metrics tied to the analysis of the business on a predictive cycle model have changed... We stated in the past that we believe this business will be deeper, wider and longer than at any time in the past [or] any cycle in the past, and the evidence keeps growing that that's the case," he remarked. "[It's] deeper in that the power and the pull of the games has continued to attract an increasing number of core and avid gamers purchasing games like Super Smash Bros. Brawl, GTA IV or Army of Two and purchasing these titles in record numbers. As the average age of the gamer has surpassed 30, it's very obvious that great games continue to attract long-time gamers."

He continued, "The cycle is also going to be much, much longer. Last week, three of our top 20 titles were for PlayStation 2, a console now in its eighth year, and I fully expect – given the computing power of the PS3 and Xbox 360 – we'll be seeing longer life as developers use the horsepower of these systems in more creative applications in the future. [The cycle] is wider in that we're seeing expanding demographics, particularly with more females and families discovering the entertainment value of gaming, emerging genres [such as] Guitar Hero and Rock Band, and releasing yesterday Wii Fit, which is blowing off the shelves, and a wide variety of systems from which to choose."