Game Crazy Critical Of Xbox 360 Allocation, Mulls Sale

U.S. specialist game retailer Game Crazy's parent company, Movie Gallery, which also includes the Hollywood Video rental chain, has reported its latest financial results, posting a loss of $12.5 million, even after a revenue boost to $572.4 million for the quarter. Of particular interest to the game market were comments on both Xbox 360 shortages and a possible sale for Game Crazy in its results. In particular, when discussing the company's outlook, Movie Gallery commented: "While we remain excited about the Xbox 360 launch later this month, Movie Gallery has recently learned that, its initial allocation of the new Xbox 360 consoles will be below original expectations, further reducing the Company's projections. We believe this issue to be industry-wide." No specific figures were given with regard to this statement. Overall, same-store revenues in all of Movie Gallery's nearly 4,800 stores in all 50 U.S. states, Mexico and Canada declined 8.6%, and same-store product sales decreased 3.0% compared to the same period last year over the entire company. Movie Gallery commented that this reflected, with regard to game rentals and sales: "...the weakness of the new game titles currently being released and the industry softness that has occurred in anticipation of the introduction of new game platforms currently scheduled for late 2005 and 2006 release." Finally, apparently unhappy with Game Crazy's position in the market, Movie Gallery announced that it looking at a potential sale, strategic partnership, or joint venture with regard to the division. Joe Malugen, Chairman, President and Chief Executive Officer of Movie Gallery, commented of this announcement: "We are committed to taking the appropriate and necessary actions to maximize value for all Movie Gallery shareholders."