GameStop 2010 Sales Rise To $9.47B

Leading U.S. specialty video game retailer GameStop on Thursday said it achieved all-time highs in sales and profits for the full fiscal year. The Grapevine, TX-based company reported annual sales of $9.47 billion for the fiscal year ended January 29, up 4.3 percent year-on-year. Profits for the period were up 8.1 percent to $408 million. GameStop CEO Paul Raines said, "In 2010, our innovations in e-commerce, digital offerings and PowerUp Rewards helped drive record sales, earnings and market share." "Our focus in 2011 is to build on the success of our PowerUp Rewards program, expand our used business and increase our digital revenues, all while delivering strong financial results," he added. As the games industry continues its transition to digital models, GameStop, which makes nearly half of its profit from used products, is adding new digital-related revenue streams. The company sells digital games on its website, owns web gaming hub Kongregate and sells points cards and downloadable content in-store. GameStop said for the full year, customers purchased $290 million worth of digital console and PC content, a 61 percent year-on-year rise. For the fourth fiscal quarter, GameStop said it generated $3.69 billion, up 4.8 percent from the same quarter a year ago. Profits were up 10.1 percent year-on-year to $237.8 million. For the coming year, GameStop expects total sales to rise 6-8 percent, and comparable store sales (which take into account only stores that have been open for a year) to rise 3.5-5.5 percent. GameStop said it plans to open around 200 new stores this year, but also expects to close 200, "primarily those overlapping store locations due to past acquisitions with expiring leases." [UPDATE: In an earnings call Thursday morning, executives added that Nintendo's upcoming 3DS as well as Microsoft's Kinect and Sony's PlayStation Move are all seeing strong consumer uptake. "We're seeing very strong demand for the 3DS," said GameStop president Tony Bartel. He said the company has been working closely with Nintendo on supply so the chain can keep preorders for the device open. 3DS launches on March 27 in the U.S. "Demand has been so strong that we are literally working every day with Nintendo to make sure we have sufficient product, and they have been very good partners on this," he said. "We fully expect to have sufficient product at launch, but demand is very strong." Bartel also said Microsoft's Kinect, launched in November, is still meeting "very strong demand, and Microsoft is meeting that demand." He said most publishers are continuing to support the device with new software, which bodes well for the platform's future. As for Sony's motion control solution, he said there's a "tremendous amount of demand" for the PlayStation Move, and that the company has "struggled" to keep it in stock.]