GameStop to Close 200 Stores as Players Gravitate to Online and Mobile
By Rob Scott
November 19, 2012
November 19, 2012
- GameStop plans to close 200 of its stores around the globe next year. The world’s largest video game retailer says 3 percent of its outlets — primarily in Canada and Australia — are operating unprofitably.
- The Texas-based company operates 6,650 stores worldwide. It recently reported that third quarter sales were down 8.9 percent from a year ago, to $1.77 billion. However, these figures are better than originally estimated and GameStop’s shares rose 4.25 percent to $24.48.
- CEO J. Paul Raines notes the company is showing “strong resilience in the face of challenging category headwinds, and the new categories of digital and mobile are creating new profit pools that we are exploiting aggressively.”
- “The retailer heads into the U.S. holidays weighed down by a two-year industry slump as players gravitate to mobile and online play from console-based games,” reports Bloomberg. “Raines said the company managed to expand margins in a ‘tough video game market’ by expanding into the re-sale of Apple iPads and other mobile devices and growing its digital download business.”
- Investors are watching this month’s launch of Nintendo’s Wii U, the first major console release in six years, to see if it will have an impact on purchases of packaged games.
- “GameStop hopes the start of a new console cycle with the Wii U launch and just-released high quality games like Microsoft Corp’s ‘Halo 4’ and Activision Blizzard’s ‘Call of Duty: Black Ops II’ will boost hardware and software sales this holiday season,” notes Reuters in a related article.
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