Kinect, High-Profile Games Drive GameStop Holiday Sales To $3B

Microsoft's Kinect and a slate of top-selling video games drove GameStop's holiday sales to $3 billion, a 5.4 percent year-on-year increase from holiday 2009, the U.S.-based retailer said Thursday. The company said comparable store sales during the nine-week holiday period ended January 1, 2011 were up 3.4 percent. Comparable store sales include sales of stores open more than one year. CEO Paul Raines said the retailer, which has over 6600 stores worldwide, "exceeded its holiday sales plan based on the strength in Kinect hardware and new software sales driven by core titles." Microsoft's Kinect sensor for Xbox 360 launched in November 2010 amid a massive marketing campaign. The Xbox house said this week at CES the sensor has shipped over 8 million units to date. Kinect drove GameStop's new hardware sales to $670 million, up 7.4 percent year-on-year. New hardware made up 22.2 percent of the company's total revenues during the holidays. New video game software sales were up 3.3 percent to $1.3 billion for the period, or 44.3 percent of total GameStop holiday revenues. Key sales drivers included Activision's Call of Duty: Black Ops and Ubisoft's Assassin's Creed: Brotherhood, among other PlayStation 3 and Xbox 360 titles, GameStop said. GameStop's "Other" category brought in $404 million in sales for a 15.9 percent year-on-year rise, led by Sony's PlayStation Move controller and Blizzard's World of Warcraft: Cataclysm. The category generated 13.4 percent of total sales. The retailer's high-margin used video game category was up 1.7 percent, bringing in $606.5 million during the holidays, or 20.1 percent of total sales. GameStop said its used sales in the U.S. specifically were up 8.5 percent, and post-holiday used game sales are "significantly outperforming expectations." Raines added that the company's PowerUp Rewards loyalty program has 6 million members. GameStop also said it produced 32 percent growth in gift card sales in December. GameStop president Tony Bartel said, "Over the holiday, GameStop reaped the benefits of its investment in e-commerce. GameStop.com sales rose more than 100 percent versus last year, far outpacing online industry growth during the period, remaining the fastest growing website in the video game space." The company reiterated previous financial guidance, expecting full-year earnings per share in the range of $2.63 to $2.69. GameStop expects comparable store sales for the full year to range from flat to 2 percent compared to last year, when the retailer reported over $9 billion in sales.