GameStop reports record-high sales of nearly $9.5 billion for its financial year, driven in part by substantial growth in digital sales on both consoles and the PC.
The digital future looked to be an ugly one for GameStop, especially in light of what happened to Blockbuster, the once-mighty movie rental behemoth that recently declared bankruptcy. But don't shed any tears just yet, because based on its financial results for the 2010 fiscal year, the company is doing just fine, thanks.
GameStop rang up record-high sales of $9.47 billion for the year ending January 29, 2011, a year-over-year increase of 4.3 percent, with profits jumping 8.1 percent to reach $408 million. GameStop's experiments in the digital market appear to be paying off particularly well, as digital sales surged by 61 percent to $290 million for the year.
"Our innovations in e-commerce, digital offerings and PowerUp Rewards helped drive record sales, earnings and market share," said GameStop CEO Pail Raines. "Our focus in 2011 is to build on the success of our PowerUp Rewards program, expand our used business and increase our digital revenues, all while delivering strong financial results."
Used game sales totaled $2.47 billion, an increase of $75 million over the previous year and a hefty chunk of the overall business, but actually shrunk as a percentage of sales because of the dramatic increase in digital revenue. That's good news for the company, as digital sales become an increasingly accessible and attractive option, forcing GameStop to find some way to compete with online retailers.
"We believe this is a notable achievement as the company seeks to diversify its revenue base and take share online as a digital aggregator," said Lazard Capital Markets analyst Colin Sebastian. "Even assuming slower growth in digital going forward, digital should represent a half billion-plus revenue opportunity for GameStop within the next two years."
And for another year, at least, I'll still have a place to buy my boxes.