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GameStop Corp. Message Board

  • choicereal111 choicereal111 Feb 2, 2010 1:20 PM Flag

    Walmart out, GME back to $27/share.

    GME dropped from around $27 to around $20 because of Walmart. Now that Walmart is out, GME should recover and then some.

    Game Over For Used Game Sales At Wal-Mart>WMT

    Feb 1, 2010 17:02:59 (ET)


    By Ben Charny
    Of DOW JONES NEWSWIRES


    SAN FRANCISCO (Dow Jones)--Wal-Mart Stores Inc. (WMT) said Monday it no longer sells used videogames from self-service kiosks inside its stores, a move that could benefit videogame retailer GameStop Corp. (GME).

    A Wal-Mart spokeswoman said America's largest retailer is removing game rental kiosks from inside 80 Wal-Mart stores. The kiosks, which began appearing about six months ago, were supplied by e-Play LLC as part of a pilot program Wal-Mart was supporting.

    In another potentially positive development for GameStop, e-Play appears to have ceased operations in the wake of Wal-Mart's decision. E-Play was viewed as a threat to GameStop, which generates about half its revenue selling used videogames.

    The closure comes after the performance of the kiosks during the test period proved underwhelming, according to Arvind Bhatia, a Sterne Agee analyst.

    A representative for e-Play couldn't be reached for comment. On Monday, the company's Web site ran a message saying it had "suspended operations, thank you to all our customers."

    Wal-Mart's decision in particular could benefit niche retailers like GameStop, which sells second-hand videogames through a network of about 6,391 stores, as of Oct. 31, 2009. The fear was with its overwhelming presence and market share, Wal-Mart could easily take share away from GameStop and other specialty shops.

    A GameStop representative didn't return a phone message seeking comment.

    GameStop shares closed up 0.8% to $19.93.

    E-Play leased space in both Wal-Mart and electronics retailer Best Buy Co. (BBY) as part of used videogame pilot programs each retailer was attempting. Best Buy conducted its tests in the Dallas and Austin markets. A Best Buy representative couldn't be reached immediately for comment.

    Bhatia, the Sterne Agee analyst, said Best Buy also wound down its pilot program and was removing e-Play's kiosks from their stores over the weekend.

    -By Ben Charny, Dow Jones Newswires; 415-765-8230; ben.charny@dowjones.com

    (END) Dow Jones Newswires

    February 01, 2010 17:02 ET (22:02 GMT)

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    • It's all academic anyway because GME had a miserable December. I'm just giving you my humble opinion on why I believe that was so.

    • rockstarsugarfreedoublestrength rockstarsugarfreedoublestrength Feb 3, 2010 9:39 PM Flag

      All of that may have been well publicized, but how much inventory of the discounted games did Walmart release on a daily basis. Judging from my visits not much, they just want to get yo in the store..

    • The december software promotion was at WMT was well publicised.

      15-20% savings on 25 top video game titles

      eg.

      Mario & Sonic at the Winter Olympics (Wii) – now $40
      Lego Rock Band (Wii) – now $40
      Rock Band: Beatles (Wii) – now $40
      MySims: Agents (Wii) – now $40
      Tekken 6 (Xbox 360 and PS3) – now $50
      Madden 2010 (Xbox 360 and PS3) – now $50
      WWE 2010 (Xbox 360) – now $50, WWE 2010 (Wii) – now $40
      Batman Arkham Asylum (Xbox 360) – now $50
      Dragon Age: Origins (PS3) – now $50
      Left 4 Dead 2 (Xbox 360) – now $50
      Halo 3:ODST (Xbox 360) – now $50
      Uncharted 2 (PS3) – now $50

      That combined with the $50 off Wii offer was what really killed GME in December IMO.

      The question is really whether they'd be prepared to do it again next Christmas or start being more promotional during the year which I think is what is scaring a lot of investors at the moment.

    • "but when they did that they only had a limited number on stock."

      That's right. Over the years that how "discount" stores always did it. Do you remember EJ Korvettes or Two Guys (east coast stores)? They alway had blow out toy ads Christmas time but had like 6 pieces in each store. People would drive from miles away to get ?????

    • rockstarsugarfreedoublestrength rockstarsugarfreedoublestrength Feb 3, 2010 6:33 PM Flag

      Anytime I was at Walmart in December I didn't notice much of a difference in the price of most of their games, and I still don't. In fact, online a lot of Gamestop games are cheaper than both Walmart and Amazon. I know that Walmart had the Wii promotion where you essentially get the Wii for $150, but when they did that they only had a limited number on stock.

    • Same store revs being down yr-to-yr 2009 to 2010: It's a good point and probably the reason the stock value is low at this point - making GME look more like a value play now than a growth stock. Cash flow generation is still huge, huge, I think $100 million or so more than they had at the same time last year. This allows them do what they do, trim the slacking stores and open new ones in better markets, acquire competitors etc. Now they are throwing a bone to the investors with a big buyback. Someone said expect a GameFly acqusition as well to help them put the used game inventory to work. There are alot of options because of the cash flow for this company to do better in the immediate future.

    • I don't believe they have ever broken it out.

      Read between the lines:
      WMT aggressively discounted games in Dec
      NPD reported industry software sales were down 4% in Dec
      GME software sales were up 15% in Nov
      But somehow dropped to 4% for Nov/Dec combined
      Factor in increased store count and GME had a might crap December.

    • rockstarsugarfreedoublestrength rockstarsugarfreedoublestrength Feb 3, 2010 6:14 PM Flag

      Can someone provide a link where Walmart announced how great their 2009 video game sales were???

    • "However, the 9 week holiday period of $2.86 Billion in overall sales revenue for GME was huge, it just looks like flat yr-over-yr to 2009 revenue as everyone already knows, because 2009 was an over-achieving time period."

      Flat revenue on increasing store count. Comps were down over 8% and that is what matters. That is not a good result in anyone's book. They underperformed the industry as a whole because of WMT.

    • I have to agree with this.

      I'm an investor and a video game player.

      2009 vs 2010 - There are more blockbuster titles coming out in 2010 than 2009. Sure Modern Warfare 2 was a monster, but there are many "mini monsters" coming out in 2010 than 2009 which should push software sales up to a new sales high.

      I truely think that most investors only look at the numbers and not at what actually driving the numbers.

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