Gamestop Corp.

GameStop holds the top score in video game retailing. Operating under the GameStop, EB Games, and Micromania banners, it's the largest retailer of new and used games, hardware, entertainment software, and accessories. It boasts some 6,600 stores in the US, Europe, Australia, and Canada. By carrying about 4,500 items, including more than 3,000 used video game titles, a majority of GameStop's revenue is generated by sales of new and used video games and their software. The company also sells downloadable add-on content from publishers. GameStop operates several e-commerce websites, offers GameStop TV in many of its locations, and publishes Game Informer, a video game magazine with some 7.9 million subscribers.

Geographic Reach

GameStop operates most of its stores in the US, where the company generates about 70% of its sales. It also maintains a healthy footprint in Europe (which accounts for 18% of revenue) and has an extended reach into Australia and Canada, which together bring in 12%.


Despite the gloomy selling forecast for retailers during the past few years, GameStop has logged its greatest revenue increases during the recession and beyond. It's seeing the largest gains among used video game products as the company lures more frugal customers who want to stay in the game even with tighter budgets. For used items, revenue rose from 23% of 2009 revenue to 27% in 2013. More consumers are turning to existing video game products, rather than new, due to their availability and cost-effectiveness. That bodes well for GameStop, because used game products (with their higher gross margins) is the company's most profitable segment. However, GameStop is facing new competition from Wal-Mart Stores, which in 2014 announced that it will begin allowing customers to trade in used video games for store credit at most of its stores. (Best Buy and Target also buy used video games from customers.)

To maintain its foothold in new and used gaming, GameStop continues to target hardcore gamers, as well as those niche customers who purchase games as gifts during the holidays. 

GameStop is banking on growing its business through video games that are delivered to users in digital form and from the expansion of other forms of gaming. Products that relate to the digital category, including Xbox Live, PlayStation, and Nintendo network points cards, as well as prepaid digital and online timecards and digitally downloadable software. To this end, the company continues to investment in e-commerce, digital delivery systems, mobile applications, online video game aggregation, and in-store and website functionality. It also plans to invest in these processes and channels to grow its digital sales base and boost its market leadership position in the electronic game industry and in the digital aggregation and distribution category. In fiscal 2012, the company grew its digital product receipts by 39%. Its digital receipts have grown from approximately $180 million in fiscal 2010 to approximately $630 million in fiscal 2013.

Financial Performance

Those gamers who jockey for the latest and greatest video game software still chose to shop at GameStop, which brought in another 40% of its 2013 revenue from new video game software. GameStop saw slight sales declines, however, among its lower-margin new video game hardware product segment (21% in 2009 to 15% in 2013). The company points to lower consumer demand and price cuts on hardware consoles for the sales slips. The sales decline on new hardware wasn't detrimental to GameStop, though, as the products generate a high single-digit profit margin for the games chain.

For the first time since fiscal 2009, GameStop in 2013 posted a loss of $269 million against a profit of $340 million in 2012 due to declining revenue. Its 2013 results include a $681 million impairment charge consisting of $627 million of goodwill impairments, $45 million of trade name impairment, and $9 million of property and equipment impairment.

In 2013 GameStop logged a 7% drop in sales -- to $8.9 billion from $9.6 billion in 2012. Decreases in comparable store sales due to declines in new video game hardware sales, new video game software sales, and pre-owned video game products were blamed for the sales slip. New video game hardware sales decreased 17%, thanks to late-season sales of current consoles and sales from the launch of the Nintendo 3DS in the first quarter of fiscal 2012. These sales declines were offset partially by the launch of the Nintendo Wii U in the fourth quarter of fiscal 2013. New video game software sales dropped 12% due to a lack of new release video game titles and declines in sales due to the late stages of the console cycle. Its pre-owned video game products sales slipped 7%, attributable to a decrease in store traffic related to the lack of new release video game titles and lower video game demand due to the late stages of the current console cycle. GameStop's overall decline in revenue was offset by revenue increases from the sales of other product categories by 21%, due to an increase in sales of PC entertainment software and mobile and the sales for the 53rd week in fiscal 2012.


Since 2006, GameStop has been aggressively expanding its business, but the retailer's stores growth is now sliding into the negative each year as the company is closing more stores than it is opening.

GameStop had focused on expanding its operations in the US and overseas, with most of its recent sales growth coming from outside the US. To its benefit, its business in Europe has helped to offset sales declines in the US related to decreased demand.

GameStop opened 146 new stores in fiscal 2013 and shuttered 227 more (as a result, slashing 80 net stores from its portfolio). In 2012, it opened 285 new stores and closed 272 stores (for 13 net new stores). In 2011, GameStop opened 359 new stores and closed 139 stores (for 220 net new stores).

During fiscal 2014, the gaming company plans to open about 65 new stores (an extremely modest number considering its history) and close another 250 stores worldwide, resulting in an expected reduction in store count of up to 3% (or an 85-store drop).

In 2010 alone GameStop added more than 220 stores to its operations across the board (107 in the US, 88 in Europe, 17 in Australia, and eight in Canada). Albeit, this is modest growth for GameStop, which opened 674 new stores in 2008, 586 stores during 2007, and 421 stores in 2006. (To the uninitiated, GameStop was a much smaller game in town just seven years ago. The company's purchase of rival Electronics Boutique in 2005 doubled GameStop's size.)

GameStop's stores are supported by several distribution centers strategically located to serve its global network of stores. Distribution centers in Texas and Kentucky serve the US segment, further supported by third-party distribution centers for new release titles. GameStop distributes merchandise to its Canadian stores from distribution centers in Ontario. It has a distribution center near Brisbane, Australia, that supports its Australian operations and a small distribution facility in New Zealand for stores in New Zealand. GameStop's European segment gets its merchandise from half a dozen regionally-located distribution centers.

Mergers and Acquisitions

GameStop is also looking to the Web's game space for growth. In 2011 the company acquired Spawn Labs, which develops peer-to-peer game streaming technology, so that gamers can access their video games and play with others (via an Internet-connected device) even when they are away from home. Spawn Labs sells its streaming applications to game developers. The business is being integrated into GameStop's research and development unit, as Spawn Labs' expertise in virtualization is key to strengthening the retailer's online gaming offerings. Also in 2011 GameStop acquired the Impulse subsidiary of software company Stardock Systems, whose online distribution platform enables gamers to purchase and download games to their computers. Impulse offers more than 1,100 games, a number that is sure to grow with Spawn Labs on board. Prior to these deals, GameStop secured a digital platform in 2010 when it acquired Kongregate, a gaming site launched in 2007 for social gaming that attracts some 10 million users a month. As part of the purchase, Kongregate operates as a wholly owned subsidiary of GameStop and maintains its headquarters in San Francisco.

Sales and Marketing

The company considers itself a destination location for gamers. It develops relationships with video game enthusiasts through its PowerUp Rewards loyalty program (launched in 2010) by allowing US consumers to trade in used video games for store credits on future purchases in its stores, on its US website, and on Its PowerUp Rewards program provides members with the opportunity to earn unique video game related rewards not available through any other retailer. Vendors also participate in this program to increase the sales of their individual products. It also have loyalty programs in France, Italy, Germany, Australia, and Spain. Altogether, its various loyalty programs total more than 27.5 million members.

GameStop spent $63.9 million in advertising in fiscal 2013, focused on newspapers, television, and other media. As part of its brand-building efforts and targeted growth strategies, the games retailer has been expanding its advertising and promotional activities in certain targeted markets at key times of the year. Additionally, GameStop expanded the use of television and radio advertising in certain markets to promote brand awareness and store openings. It's also working to leverage its loyalty programs to boost its membership base and is adding loyalty programs in international markets to build its brand.

Company Ownership

FMR LLC owns about 16% of GameStop.

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Gamestop Corp.

625 Westport Pkwy
Grapevine, TX 76051-6740
Phone: 1 (817) 424-2000


  • Employer Type: Public
  • Stock Symbol: GME
  • Stock Exchange: NYSE
  • CEO: J. Paul Raines
  • Chairman: Daniel DeMatteo
  • CEO: J. Paul Raines

Major Office Locations

  • Grapevine, TX

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