GameStop posts strong results, warns of supply problems
Leading US videogame retailer GameStop has announced its financials for the second quarter, ended July 31, revealing strong growth in sales and revenue but cautioning of ongoing hardware shortages of PS2 and Xbox.
Leading US videogame retailer GameStop has announced its financials for the second quarter, ended July 31, revealing strong growth in sales and revenue but cautioning of ongoing hardware shortages of PS2 and Xbox.
The company announced revenues of $345.6 million for the three month period, which was up 13 per cent on the previous year's total - while income rose by over $1 million year on year, reaching $7.7 million.
The increased revenue was largely down to better sales of software, with game software revenues rising by an impressive 17 per cent thanks to strong sales of Activision's Spider-Man 2, EA's NCAA Football 2005 and Sega/Take 2's budget priced ESPN NFL 2k5.
However, the firm saw difficulty in the console hardware market, as both Sony and Microsoft struggled to fill inventories after the price cuts to the PS2 and Xbox during the quarter increased demand for the systems.
"We experienced strong hardware sales at the beginning of the second quarter," according to GameStop CEO R. Richard Fontaine, "due to price cuts on the Microsoft Xbox and Sony PlayStation 2 systems and our in-store promotional activities."
"However," he continued, "unanticipated hardware shortages in late June and July on the PlayStation 2, and to a lesser extent, the Xbox, impacted the momentum that we had built earlier in the quarter."
Stock shortages in this area isn't a theme unique to GameStop either - many US retailers have been reporting difficulties in filling customer demand for PS2 and Xbox hardware, and in fact, overall hardware sales in the USA dropped by some 7 per cent in July on the back of shrinking US inventory of the PS2.
However, GameStop is confident that this hurdle can be overcome; aside from the fact that Sony is expected to introduce a major new hardware shipment to the US market shortly, the retailer believes that the next two quarters will be incredibly strong. The coming six months could see "the most robust software line-up in the last five years," according to Fontaine.