GameStop Loses $269.7 Million in Fiscal 2012

 Pages 1 2 NEXT
 

GameStop Loses $269.7 Million in Fiscal 2012

image

The biggest game retailer in town has posted their earnings report for the past 12 months, and the results are mixed.

GameStop recently posted their Sales and Earnings report for the 2012 fiscal year, so get ready to talk some numbers. The year was somewhat rough on the company, with CEO Paul Raines admitting that it was a "challenging year for console gaming." While GameStop profits are up, the retailer took a hit to total sales and reported a net loss of nearly $270 million. As it stands, the company is trying to hold out through 2013 until the launch of the next generation of consoles, which it believes will reinvigorate sales.

For 2012, GameStop reported total global sales of $8.89 billion (down 7% from last year) and a net loss of $269.7 million (compared to last year's net earnings of $339.9 million). Despite the overall loss in funds, the company is doing well with profits, reporting a gross profit of $974.9 million, $30 million more than fiscal 2011.

Projections for the year of 2013 are optimistic, hinging on a strong year's end. "As we look towards the start of the new console cycle, our industry market model indicates a return to growth with the launch of new game systems," says Raines. "GameStop is strong, healthy, and ready to lead the industry and its customers into the next phase of gaming." The company anticipates a "strong finish" from late-year releases like Grand Theft Auto V, but not much business until then. "GameStop expects the first half of the year to be challenging as customers postpone purchases leading up to the fourth quarter console launch."

Despite the past year's losses, Raines is confident that GameStop has laid the foundations for profitability moving forward. "We expanded our market leadership position, maintained our financial strength and controlled our spending," he states. "Perhaps most importantly, we invested in our mobile and digital businesses to position the company of future success." We'll see if he was right as the year unfolds.

Source: GameStop

Permalink

This would be as good a time as ever to look into big trade-in promotions. Since there's not much going on between now and Q4 and the new console gen is about to start they might as well try to liquidate some of their current-gen used games.

And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

I never even considered how badly Gamestop would want the nextgen consoles to come out. Th last three times I've gone into a local store I haven't bought anything thanks to steam sales. But if the new consoles come out people might need to head back down to their local Gamestops more often to get the system and all the bells and whistles that usually come with it.

The vultures are circling brick and mortar.

There are huge investment opportunities for barnes and noble, gamestop, circuit city, blockbuster, hollywood video, and best buy!

Wait, some of them don't exist anymore.

Whatever. Buy stock in the rest. Genius plan.

Fappy:
This would be as good a time as ever to look into big trade-in promotions. Since there's not much going on between now and Q4 and the new console gen is about to start they might as well try to liquidate some of their current-gen used games.

Basically this. I remember in the past that Gamestop was considering selling old games from like the 6th Gen and the 5th gen of consoles. I guarantee that would bring sales up because a lot of older games are super expensive online. An example is The Misadventures of Tron Bonne for the PS1. The cheapest copy of that game I've ever seen was $110, and that was for a used copy. If Gamesstop were to start selling the older stuff again then that should help them out I think.

Neronium:

Fappy:
This would be as good a time as ever to look into big trade-in promotions. Since there's not much going on between now and Q4 and the new console gen is about to start they might as well try to liquidate some of their current-gen used games.

Basically this. I remember in the past that Gamestop was considering selling old games from like the 6th Gen and the 5th gen of consoles. I guarantee that would bring sales up because a lot of older games are super expensive online. An example is The Misadventures of Tron Bonne for the PS1. The cheapest copy of that game I've ever seen was $110, and that was for a used copy. If Gamesstop were to start selling the older stuff again then that should help them out I think.

Yeah, there's plenty of GBA games I wish I could get my hands on and would gladly pay for some PS1 games I missed out on the first time around. Honestly, I'm old fashioned I guess when it comes to buying my games. I trust having the game in my hands and not just a program on my computer. That and I just like going out and talking to some other people if only for a little bit and thankfully, the people at the Gamestop don't bloody hassle me to death about pre-ordering something, just once while ringing me up and that's it.

i think it might be karma at work.

or just the plain old logic that, if you try and scam your customers, they wont be comming back and invest in anything you offer.

Cognimancer:
For 2012, GameStop reported total global sales of $8.89 billion (down 7% from last year) and a net loss of $269.7 million (compared to last year's net earnings of $339.9 million). Despite the overall loss in funds, the company is doing well with profits, reporting a gross profit of $974.9 million, $30 million more than fiscal 2011.

Not sure what the difference is between earnings and profits is supposed to be, but generally if you can make more profit even while sales decrease, you must be doing something right.

rhizhim:
i think it might be karma at work.

or just the plain old logic that, if you try and scam your customers, they wont be comming back and invest in anything you offer.

Not only that but where I live their are three within less then a two miles of each other. Seriously if they placed their stores further out they will make more money because why do they feel gamers want three gamestops on the same street.

Cognimancer:
For 2012, GameStop reported total global sales of $8.89 billion (down 7% from last year) and a net loss of $269.7 million (compared to last year's net earnings of $339.9 million). Despite the overall loss in funds, the company is doing well with profits, reporting a gross profit of $974.9 million, $30 million more than fiscal 2011.

Okay, gross profit $974.9 million, net "profit" -$269.7. That means over $1.2 billion disappeared somewhere between "gross profit" and "net profit". I'm guessing (just guessing, mind you) that somebody claimed some massive writeoffs to avoid paying corporate taxes on what amounts to a healthy profit.

Ya know, when I go shopping for hard copies I go into the GameStop. I see that used game for ~30-40€, or new for 50-60€ (PC!). Then I go to the big electronics retailer across the street with half a floor for gaming (bigger than the fucking house I live in). I get the same game new for less than I have to pay for used in that shitstore.

I won't shed a single tear if GameStop goes under.

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

Corporate math.

It's like if you predict you will make 1 Million this year and you only make $20,000, that's a loss of $980,000. It's retarded.

Whoever wrote this article doesn't understand a single thing about financial reports.

"Excluding restructuring, impairment and debt retirement expenses, GameStop's adjusted net earnings for fiscal year 2012 were $403.0 million compared to adjusted net earnings of $405.1 million in fiscal 2011."

'Including restructuring, impairment and debt retirement expenses of $680.7 million ($672.7 million, net of tax benefit) primarily related to goodwill impairment in the third quarter of 2012, GameStop's fiscal 2012 net loss was $269.7 million compared to net earnings of $339.9 million in fiscal 2011.'

Their reports aren't out yet, these are preliminaries, but I'm curious to know what exactly they restructured so heavily and what they considered impaired.

Let alone their watered down report states
(Measured in millions if you don't know how to read financial statements)
"Consolidated net income 261.1 174.3 "

CONSOLIDATED NET INCOME, AKA INCLUDING THEIR SUBSIDIARIES IS UP FROM 2012 TO 2013. Don't just look at the parent, look at the group Brett.

A parent's report on their own doesn't include intra-group transactions, of which there are presumably many due to a restructuring occurring.

It's halfway down the page when you start coming to their initial financial statements (this being the statement of comprehensive income)

Jeez.

I still fail to see what it is that makes people hate GS so much, I wouldn't have half the console games I have now if it wasn't for them. The day brick and mortar stores go away is the day I give up on consoles completely and severely back off on PC purchases.

rapidoud:
snip

Thanks for this post, the article came out a bit too sensationalist and way too dumbed down.

Start selling retro consoles/games game-stop. To everyone else I don't have any local gaming shops aside from game-stop so if they go under it's back to wal-mart. I would rather eat my own gun then game-shop at Walmart.

I helped out a friend who is the store manager at my local GameStop. He needed someone to come in over the summer and I came in and promptly got some of the best sales numbers in the region without using any dirty sales tactics that our regional manager went on and on about. Then one day a guy and his wife came in and I explained all the ins and outs of 360, PS3 and Wii to them. I went over all the pros and cons for each console for 45 goddamn minutes. In the end they decided to go with a 360 4 gig package.

A week later the customer called and wasn't able to start Forza 3. I tried to guide him through it over the phone and it became apparent that he wasn't the sharpest tool in the shed. But I got him going. That was Saturday. On Sunday I didn't work, but got a call from my colleague who took that shift. She told me some guy had called and was really pissed off about not having any hard drive space.

On Monday I came in for a short shift to close the store and the store manager told me that this idiot had been calling all day making demands about being reimbursed for gas, getting a brand new console with a hard drive for no extra cost and free games. Pure idiocy. Manager guy had tried to call him but no answer and then had to leave and told me that they had come to an agreement to buy a 360 hard drive at a reduced price. So I was alone in the store and the guy calls again, really annoyed. I told him that my manager had tried to call him and he went "my phone has been silent all day" and I said "well, my manager said that he called you" and he went "are you calling me a liar?". Completely irrational. I checked the number and found that my store manager had dialed a 7 instead of a 9. So I asked about their agreement and he said that he wanted a new xbox, that I lied to him and so on. I told him that I was only authorized to do what my manager had given me the green light on and then other customers came in so I had to say goodbye to him.

Five minutes before closing he came in with the entire package, dumped it on the counter and just said "I want to return this and I'm not leaving until it's done". I called my store manager, he wasn't available, so I called the regional manager and tried to explain the whole thing while that pissed off customer was whining and moaning right there in front of me. I gave him the phone and closed the front of the store so no more customers would walk in. He talked to the regional manager for a long time, saying that I had lied to him, that he had been cheated and so on. I got on the phone again and said that wasn't true. The customer isn't always right, especially not when he's a lying, stupid asshole, and I refuse to take shit that situation. 45 minutes after I should have closed the store he finally got his 320 gig xbox for the same price as the 4 gig and we had to do some inventory juggling in the computer, but the issue was resolved.

Then summer ended and I got back to my regular job, told my store manager friend that if he needed help he should just give me a call. I regularly came in to chat with the other people working in the store and then in November my friend told me that he had to get something off his chest. Apparently the regional manager had told him to not let me work in the store anymore because of that incident. I told him that it was ridiculous, because I had the best numbers in the store and among the best in the region while chatting with a lot of the customers, giving out as much good advice as I could. He agreed but had to follow orders from up high. Apparently that's the modus operandi for GameStop. If an idiot customer screams loudly enough, GS caves. Anyway, I haven't been back to the store since then and I've told my other friends what a bullshit operation it is. They're not getting my money again.

People hate these guys for a reason, I worked for this company. They are so bad, the labor board of my province won me a hefty sum of money for the way they treat employees.

That sucks Dakkster; some customers just whine and moan until they get what they want because everything's everyone elses fault and should accommodate them.

Would Forza 3 even be faster installed? What a nutter, but he probably got ripped off anyway as used x360s are $70 and new ones are $120.

But I guess they didn't like the negative reputation, even though you had swathes of customers vouching for your name and one imbecile who's never going to come back to the store anyway throws a hissy fit.

Also; captch is describe the citibank brand with any words?

Net loss is one of those concepts that really shouldn't be treated as such a huge deal... "We didn't make more profit than we did last year! We... we made less! We're not growing! Stagnation! End of the world!"

Christ, it's pathetic... hills and valleys, businesspeople, we all go through 'em.

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

well you could have the intermediate profits (the ones before administration spending and interest and so on) and still have losses afterwards.

And i agree with the sentiment, the sooner retailers go down the better. We dont need to pay extra for the middleman.

Cecilthedarkknight_234:
Start selling retro consoles/games game-stop. To everyone else I don't have any local gaming shops aside from game-stop so if they go under it's back to wal-mart. I would rather eat my own gun then game-shop at Walmart.

oh really? have you forgot about the internet?

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

because of the terms Gross(total money takein in w/o expences) and net(includes expenses)

Gross Profits are a given fact provided you sold something.
Net Profits are not.

Sounds like a bunch of weasel-speak to me.

If you end the year with more money than you started, then you made a profit.
If you end the year with less money than you started, then you have a loss.

major_chaos:
I still fail to see what it is that makes people hate GS so much, I wouldn't have half the console games I have now if it wasn't for them. The day brick and mortar stores go away is the day I give up on consoles completely and severely back off on PC purchases.

Probably because most people have access to the internet and feel comfortable buying games online.
If you have the time and knowledge you can buy and sell your own games and make and save way more than fooling with gamestop. I've got Skyrim coming in the mail and I only paid 13.58, gamestop has it listed used for $40. They're about profit but I pay attention to the market and it says 2+ year old games devalue faster than $10 a year.

Strazdas:

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

well you could have the intermediate profits (the ones before administration spending and interest and so on) and still have losses afterwards.

And i agree with the sentiment, the sooner retailers go down the better. We dont need to pay extra for the middleman.

Cecilthedarkknight_234:
Start selling retro consoles/games game-stop. To everyone else I don't have any local gaming shops aside from game-stop so if they go under it's back to wal-mart. I would rather eat my own gun then game-shop at Walmart.

oh really? have you forgot about the internet?

No i haven't forgotten about the net with amazon or ebay. I just hate getting bent over with shipping/handling unless it's collector's edition game from nisa or atlus.

Cecilthedarkknight_234:

Strazdas:

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

well you could have the intermediate profits (the ones before administration spending and interest and so on) and still have losses afterwards.

And i agree with the sentiment, the sooner retailers go down the better. We dont need to pay extra for the middleman.

Cecilthedarkknight_234:
Start selling retro consoles/games game-stop. To everyone else I don't have any local gaming shops aside from game-stop so if they go under it's back to wal-mart. I would rather eat my own gun then game-shop at Walmart.

oh really? have you forgot about the internet?

No i haven't forgotten about the net with amazon or ebay. I just hate getting bent over with shipping/handling unless it's collector's edition game from nisa or atlus.

I was more leaning towards digital version but yeah shipping works too.

Capcha: peter out
damn you i want to watch family guy now

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

This, "net loss" is a technical term, and the opening post has improper use of it and a very misleading title. A quick search of those words can lead to a much better article IMO.

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

Gross profit and net loss aren't, though. Gross profit is how much money you make off of the good/service sold, while net profit is how much you have left over after paying your bills and taxes.

EDIT: I'm sorry for quoting you after all those people did.

Something tells me Gamestop spent a little too much on advertisements last year. That's the only reason I can imagine such high net loss.

major_chaos:
I still fail to see what it is that makes people hate GS so much, I wouldn't have half the console games I have now if it wasn't for them. The day brick and mortar stores go away is the day I give up on consoles completely and severely back off on PC purchases.

For most people (like those whining in this thread) it's because they don't get $20 in trade for their game from 6 years ago, or get full trade in because there are 10 used copies of that very game on the shelf.

Personally, I'm not concerned. I like GameStop, and I don't see them going away as long as most of the US has sub-standard internet coverage.

gphjr14:

Probably because most people have access to the internet and feel comfortable buying games online.
If you have the time and knowledge you can buy and sell your own games and make and save way more than fooling with gamestop.

But where can you do it with half the convenience? For selling the closest I have come is Glyde, and while it is a nice site, I still seldom get more than what GS is offering after you account for fees, and its also much slower and with the constant concern that the game will get stolen out of the mail. Selling on Ebay is a massive pain and in no way worth when there isn't any certainty that someone will buy from you, rather than one of the half dozen Micro-stores offering the same thing but with the assurance of a couple thousand positive feedback.
Buying is much the same, sometimes people tell me to just use Amazon, and while that sometimes gives me slightly better prices I have to deal with either paying everything I saved on shipping or wait a week to actually get what I bought, all while worrying that its going to get lost/stolen/damaged on the way and I'm going to need to dick about proving that I never revived it. In the end GS is just so much less hassle that its worth the slightly worse prices.

Xpwn3ntial:

cidbahamut:
And not a single tear was shed.

Also: How do you have net losses when you have profits? Profit and net losses are mutually exclusive.

Gross profit and net loss aren't, though. Gross profit is how much money you make off of the good/service sold, while net profit is how much you have left over after paying your bills and taxes.

EDIT: I'm sorry for quoting you after all those people did.

Something tells me Gamestop spent a little too much on advertisements last year. That's the only reason I can imagine such high net loss.

If you'll read my post, they didn't. Their consolidated comprehensive income/consolidated net profit is up $90mn from last year, which includes all their subsidiaries. AKA Their profit went up, not down. You're looking at the wrong figures.

If you're looking to invest in gamestop then you look at their consolidated reports as they are a parent. Looking at their own report doesnt' take into account intragroup transactions, and they may have been buying up lots of things from its subsidiaries for whatever purpose (which would be detailed in the notes to the financial statements which we do not have yet).

In a consolidated report, intra-group transactions are eliminated, but in the subsidiaries/parents own reports they aren't. GS and a subsidiary could continually sell stock over and over to each other to inflate certain figures like sales, CoGS or whathaveyou, but the consolidated report will eliminate all of those and give a truer figure.

The consolidated report is also what you'd look at if you were to judge gamestop as a company as well, which was not done by anyone in this thread.

As for you Brett, you said their profit was good, but you didn't even realise earnings and profit are the same bloody thing; net earnings = net profit, and you said profit when you should've said their gross profit was good.

By the way, don't ever just say profit/earnings/income on its own people.

Gross Profit/Earnings/Income, Net Profit/Earnings/Income/net profit after tax (which is what it should be called, NPAT), profit attributable to non-controlling interests, and accounting profit/profit before tax/earnings before tax (I've even seen it called just Profit on its own, then profit after tax are all technical names. They are some of the only things actually defined by the FASB; you can actually call those reports whatever the damn hell you want. Stop arguing over the semantics of it and just let people call it whatever the hell they want except for Brett who should quote the names that gamestop supplies, let alone avoid sensationalist journalism.

So stop being pedantic in other words.

major_chaos:

gphjr14:

Probably because most people have access to the internet and feel comfortable buying games online.
If you have the time and knowledge you can buy and sell your own games and make and save way more than fooling with gamestop.

But where can you do it with half the convenience? For selling the closest I have come is Glyde, and while it is a nice site, I still seldom get more than what GS is offering after you account for fees, and its also much slower and with the constant concern that the game will get stolen out of the mail. Selling on Ebay is a massive pain and in no way worth when there isn't any certainty that someone will buy from you, rather than one of the half dozen Micro-stores offering the same thing but with the assurance of a couple thousand positive feedback.
Buying is much the same, sometimes people tell me to just use Amazon, and while that sometimes gives me slightly better prices I have to deal with either paying everything I saved on shipping or wait a week to actually get what I bought, all while worrying that its going to get lost/stolen/damaged on the way and I'm going to need to dick about proving that I never revived it. In the end GS is just so much less hassle that its worth the slightly worse prices.

I've used both eBay and half.com without ant troubles. Buyer pays for shipping all I pay is about a dollar for an envelope. You're correct there is the chance that some deadbeat will bid but not pay but that rarely happens. Half.com only allows buyers so if they want it they'll have to pay for it right then. Only problem with half.com is they only pay out twice a month on your sales.

I just sold God of War Ascension for $39 minus the cost of an envelope I've made 8 more dollars than if I took it to gamestop. Not to mention the person who bought it is saving money because gamestop is only marking used copies down $6. That doesn't even guarantee an online pass is included. This person is getting that plus the pre order bonus DLC for about $45. It just boils down to patience and accessibility to a computer and a post office.

dakkster:
I helped out a friend who is the store manager at my local GameStop. He needed someone to come in over the summer and I came in and promptly got some of the best sales numbers in the region without using any dirty sales tactics that our regional manager went on and on about. Then one day a guy and his wife came in and I explained all the ins and outs of 360, PS3 and Wii to them. I went over all the pros and cons for each console for 45 goddamn minutes. In the end they decided to go with a 360 4 gig package.

A week later the customer called and wasn't able to start Forza 3. I tried to guide him through it over the phone and it became apparent that he wasn't the sharpest tool in the shed. But I got him going. That was Saturday. On Sunday I didn't work, but got a call from my colleague who took that shift. She told me some guy had called and was really pissed off about not having any hard drive space.

On Monday I came in for a short shift to close the store and the store manager told me that this idiot had been calling all day making demands about being reimbursed for gas, getting a brand new console with a hard drive for no extra cost and free games. Pure idiocy. Manager guy had tried to call him but no answer and then had to leave and told me that they had come to an agreement to buy a 360 hard drive at a reduced price. So I was alone in the store and the guy calls again, really annoyed. I told him that my manager had tried to call him and he went "my phone has been silent all day" and I said "well, my manager said that he called you" and he went "are you calling me a liar?". Completely irrational. I checked the number and found that my store manager had dialed a 7 instead of a 9. So I asked about their agreement and he said that he wanted a new xbox, that I lied to him and so on. I told him that I was only authorized to do what my manager had given me the green light on and then other customers came in so I had to say goodbye to him.

Five minutes before closing he came in with the entire package, dumped it on the counter and just said "I want to return this and I'm not leaving until it's done". I called my store manager, he wasn't available, so I called the regional manager and tried to explain the whole thing while that pissed off customer was whining and moaning right there in front of me. I gave him the phone and closed the front of the store so no more customers would walk in. He talked to the regional manager for a long time, saying that I had lied to him, that he had been cheated and so on. I got on the phone again and said that wasn't true. The customer isn't always right, especially not when he's a lying, stupid asshole, and I refuse to take shit that situation. 45 minutes after I should have closed the store he finally got his 320 gig xbox for the same price as the 4 gig and we had to do some inventory juggling in the computer, but the issue was resolved.

Then summer ended and I got back to my regular job, told my store manager friend that if he needed help he should just give me a call. I regularly came in to chat with the other people working in the store and then in November my friend told me that he had to get something off his chest. Apparently the regional manager had told him to not let me work in the store anymore because of that incident. I told him that it was ridiculous, because I had the best numbers in the store and among the best in the region while chatting with a lot of the customers, giving out as much good advice as I could. He agreed but had to follow orders from up high. Apparently that's the modus operandi for GameStop. If an idiot customer screams loudly enough, GS caves. Anyway, I haven't been back to the store since then and I've told my other friends what a bullshit operation it is. They're not getting my money again.

I feel you. I hate it when stores cave because of some possible bad PR.

Newsflash: One bad customer = Not the end of the world.

 Pages 1 2 NEXT

Reply to Thread

Log in or Register to Comment
Have an account? Login below:
With Facebook:Login With Facebook
or
Username:  
Password:  
  
Not registered? To sign up for an account with The Escapist:
Register With Facebook
Register With Facebook
or
Registered for a free account here