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GameStop holiday sales disappoint as preowned falters
GameStop holiday sales disappoint as preowned falters
January 8, 2013 | By Mike Rose

Video game retailer GameStop saw strong digital and mobile growth over the holiday period, but it wasn't enough to counter the notable decline in retail sales.

New game hardware sales decreased by 2.7 percent year-over-year, despite the launch of the Nintendo Wii U in November. GameStop says that it sold 320,000 Wii U units, describing the launch as "successful" -- although analyst firm Baird Equity wasn't so kind, instead labelling the figures as a "somewhat soft sell-through."

GameStop's real problem was its decline in pre-owned game sales. New software sales were down 5 percent year-over-year, which wasn't a huge surprise -- but in comparison, used product sales were down 16 percent.

GameStop says this was due to limited inventory and less promotional activity over the Christmas period, but Sebastian warns that there is "ongoing downward pressure on used software pricing and volume" due to the fact that we're currently in the very late stages of this console cycle.

However, there's no denying that GameStop is making progress as far as digital revenue is concerned. The company reported a 40 percent increase in digital sales, while its mobile business generated nearly $77 million in revenue over the holiday period.

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Jon Fox
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Wait, so is Gamestop blaming poor holiday sales on the fact that they are in the late stages of this console cycle? What console? Wii?

Alan Rimkeit
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Good bye to Game Stop and their shady business practices? I hope so. Selling games as new when they are used and crap like that have made my view of them as low as it can get. They are going the way of Blockbuster and Best Buy.

Troy Walker
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Been to a brick and mortar lately to see the shelves full of games? no, well good choice... 'cause there aren't any to buy, the shelves are practically empty or only have games that are totally available as digital downloads.

Their business model is clearly dead.

Lincoln Thurber
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I think GameStop simply is catching up to the public relations nightmare their business model has created. Their brand name has been damaged for years, but it is only now starting to catch up with them as box-stores proliferate in more communities and as online sales of every type gain ground. There are now alternatives to shopping at a dedicated game story and people are taking advantage of those alternative.

steve roger
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They should have latched on to the EB Games model. Instead they swalled that chain whole and destroyed everything that was decent about EB Games. I am not so sure about the lack of consumer attachment to Gamestop. There are a lot Gamestops in a relatively small geographic area where I live. I have two boys 11 and 14--you can imagine our game/console budget and the number of trips to the Gamestops. Every store we visit was packed during the holidays. Lots of people picking up and making pre-preorders. The business looks healthy from this vantage point.

John Flush
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Having usually taken advantage of their buy 2 get 1 free on used game deal and such for games for my kids and family I only went into two stores (one at a mall, one on purpose) before I realized I could just get exactly what I wanted by going on Amazon - I could find games that had boxes, with manuals, or even still in the plastic (new) at all reasonable prices that I would probably wouldn't find at a Gamestop anyhow. So why bother with this store at all?

Amazon is the new retailer of choice for me. That and steam sales... Buy enough to get you to the next Steam sale...

Bob Johnson
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I don't shop there. I never liked the atmosphere.

Curtiss Murphy
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Why the hate for GameStop? I'm inclined to give the last few brick-and-mortar game stores a bit of support. Online is great, but I don't want GameStop to go the way of the dodo...

Alan Rimkeit
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Because they have a nasty habit of selling games that are used as new. Because they give crap for the credit for used games and then sell them as new. Because they take things like EA on-line passes out of the packages and then screw the customers. That is why. They are shady. It is that simple.