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GameStop Shares Tumble But Analyst Predicts 2010 Rebound

After poorer than expected sales this past holiday season, GameStop shares took a big hit on Friday.

It has been repoted that GameStop sales for the nine-week period ending January 2 were down 8.6% in comparison to 2008, which is significantly lower than most projections. As a result, GameStop stock fell drastically on Friday before reclaiming a bit of traction; the market closed with a share price at $20.46, which is a 15% decline. The company has also cut its fourth-quarter forecast as they're now predicting a fall of 8.5 - 9.5%, which is worse than the initial 4-7% expected decline. However, with the excellent software lineup for 2010, there's a good possibility that the retailer could rebound nicely. According to GamesIndustry.biz, Wedbush Morgan analyst Michael Pachter thinks both GameStop and the industry will come up this year:

"We believe that industry sales will rebound in 2010 and that GameStop is well positioned to gain share the first half of the year. The company has high exposure to the hardcore software releases, which we expect to drive market growth in 2010, and comparatively low exposure to hardware, which we expect to decline."

He also adds that GaemStop's "appeal to hardcore gamers will become increasingly important as Wii sales stagnate and Q1's long-awaited slate of games comes to market." See? This is what happens when too many blockbusters get pushed out of a holiday season; we get a jam-packed first quarter and lower-than-anticipated holiday sales. Next time, publishers, don't be so damn frightened of games like Call of Duty: Modern Warfare 2. ...okay, well, maybe you should be.

1/8/2010 8:57:36 PM John Shepard

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Comments (21 posts)

fluffer nutter
Friday, January 08, 2010 @ 11:14:41 PM
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I think the fierce competition is starting to affect GameStop. Amazon dot com continue to have great deals on games and they have great payouts for used games which automatically give you credit to use on future purchases. Now, that Amazon and Toys R Us are in the game trading market, and have better payouts, it's going to get tougher for GameStop which is good for everyone. A healthy competition breeds deals for everyone.

Last edited by fluffer nutter on 1/8/2010 11:14:54 PM

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Scarecrow
Friday, January 08, 2010 @ 11:25:45 PM
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Wii people support stores like Gamestop

Hardcore gamers don't (not the smart ones any way)

Anything but Gamestop, I'd even buy games at the dead Circuit City

local stores FTW

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Hezzron
Friday, January 08, 2010 @ 11:36:32 PM
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I know GS sells new games, but I imagine they get most of their business from the used market.

Could you imagine getting a beat-up, worn-out, smelly used game as a gift? It'd be like unwrapping a lump of coal.

I would hope people gift new games.

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Alienange
Saturday, January 09, 2010 @ 1:38:58 AM

"smelly" is right.

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St_Jimmy
Saturday, January 09, 2010 @ 9:29:15 AM

like 90% of there used stuff is just like new. I'm pretty sure they package it again too.

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Geobaldi
Friday, January 08, 2010 @ 11:47:23 PM
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I get just about all my games online so it makes no difference to me if Gamestop makes a profit or not. I haven't been to one in over two years now.

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goodgamer
Saturday, January 09, 2010 @ 12:21:58 AM
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i like they return policy on use games,

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LowKey
Saturday, January 09, 2010 @ 12:43:45 AM
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I say GOOD let them squirm a bit. After all the money they charge for used games, its nice to see them start to lose a bit of money and chew that humble pie.

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BlackBriar
Saturday, January 09, 2010 @ 12:45:49 AM
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Great News!! People need to stop shopping at ShitStop!!

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LowKey
Saturday, January 09, 2010 @ 12:50:23 AM
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What does he mean stagnate? Last I checked Wii was sold out by boxing day. Like I said in an earlier post, Wii is still going petty strong. I'm not taking Nintendos side, But I do believe in giving credit where credit is due.

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Alienange
Saturday, January 09, 2010 @ 1:37:44 AM
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Michael Pachter has been making me laugh for a good two years now.

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Qubex
Saturday, January 09, 2010 @ 2:14:43 AM
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When you compare your bottom line to the boom years, it is only obvious a drop will evident in leaner years. Nothing really new; that is were the adage comes; you buy at the lows and sell at the highs... because you will always have this in a capitalistic dominated world... timing is what is important, common sense and logic...

Q!

"i am home"

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Gamer Girl Gemo
Saturday, January 09, 2010 @ 4:40:22 AM
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Ouch GameStop... Ouch. Way to take one for the team... But don't worry, the used games are all the rage this year! ;)

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Robochic
Saturday, January 09, 2010 @ 4:55:55 AM
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It doesn't suprise me that they took a hit, I still cant' get past what they give you for a used game and then they turn it around and market back up to maybe 5 dollars cheaper than the new price ? I know they do it for the mark up but come on thats just annoying. Plus I am noticing more and more Walmart for the first 3 days the game is out they have it 10 dollars cheaper than anywhere else and now you can preorder at walmart too so thats what I did for heavy rain cause they said it would be 69 but i'm getting it for 59 thats a great deal!

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JackC8
Saturday, January 09, 2010 @ 6:51:49 AM
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The reason I don't like Gamestop is that the one time I went there to buy something, I took the empty case for the game up to the counter, and they didn't actually have the disk. They offered me a used copy for "a couple bucks less", which would have been about $5 more than Amazon wanted for a new copy. So I ended up getting a different game, which is the worst one I own.

I don't care for their cramped stores piled high with used games, the new PS3 games way in the back on two tiny shelves down by the floor, the way merchandise is scattered all over the place, hanging on the walls, completely random. If I didn't buy everything online, I'd probably go to Kmart, Target or Walmart. At least their stores are neat and organized and don't look like a closet packed to overflowing.

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LegendaryWolfeh
Saturday, January 09, 2010 @ 7:52:32 AM
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Hate to say it, but everyone doesn't have the same xperiences at every gamestop. I enjoy my gamestop quite a bit, most people there are ps3 or pc savvy and most actually dislike the 360 (not saying i do or anything). But I mean I even have my gamestop manager on my friends list, and he's one of the ones looking forward to mag =P I agree gamestop used prices are out of whack and such but hey, at least they have a large collection of used games for you to get if you missed out on them. Me personally, I probably won't ever leave gamestop because of the extra incentive I get to buy from them, ie. extra goodies and such. Also because I like driving down there and picking up my new copies of games =) If you don't like the whole used game deal then buy new, lol, give money to them developers =P

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rogers71
Saturday, January 09, 2010 @ 9:25:02 AM
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Thanks for posting this John,
Now I won't be able to sleep tonight. I am so broken up about this. I may have to empty my savings account and go to Gamestop tonight.

Can everyone sense the sarcasm?

All joking aside, my local gamestops have been going downhill for a couple of years now. They have a habit of hiring xbots and promoting the crap out of Halo and burying the PS3 games in the back of the store. They have even stuck the PS3 display in the corner so it is hard to get to for kids to try out demos of games.

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Cuetes
Saturday, January 09, 2010 @ 12:56:08 PM
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This is just my opinion but I think maybe if they showed equal support towards all gaming systems, the numbers would be different. I visited several GameStops this holiday season, they all seemed to gravitate towards the Xbox 360 and Wii. Those systems are on the way down because people are starting to see the PS3 as the better console, therefore I believe until they balance the equation they will continue to spiral down.

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fluffer nutter
Saturday, January 09, 2010 @ 2:56:07 PM

I don't know if showing equal support would change the way GameStop is going because they've been doing it for so many years that people pretty much know what biases their local shops have. I have noticed some rearranging by consoles in several other store chains and you can definitely tell who supports what. The local Best Buys have reduced the PS3 section and moved it to the back of the video games section while they have doubled the Xbox 360 section and moved it into a more visible area. Micro Center has four times the wall space for Xbox 360 than they previously had and have reduced the PS3 section to half of what it was. Target has a doubled their PS3 section and it is still directly in front of the register.

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BikerSaint
Saturday, January 09, 2010 @ 11:34:30 PM
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GS/EB stores can only be a ripoff to you if you let them! Since I'm a collector, I never trade any games in.

As for myself, I have no problem with my 5 local GS/EB stores.

I almost always buy my systems used. And I always buy "used" games now, and only after they've dropped below my $20 price point, or whenever they're doing a B2-G1F deal.

Also the store staff all know me & hip me to items they've just gotten in, that I probably want(a few have even held items in the back till I could confirm wheter I wanted it or not)

Plus they know I collect, so they always give me some new swag whenever it comes in.

As the SLN's Garrit Morris used to say......
GameStop has been velllly, velllly, good to me!

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___________
Sunday, January 10, 2010 @ 1:44:37 AM
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dont want to sound mean or anything but it serves them right.
thats what happens when you screw your customers around and jack up your prices $20 more than other stores.
as ive said before EB are bloody dam lucky JBHIFI does not have a 7 day return policy otherwise i would never go to EB and buy all my games from JB.
not to mention there trade in values are a complete rip off.
i traded in killzone 2 today and only got 20 bucks for it.
WTF?
1 bluray disk by itself is 20 bucks.
fu***ng stingy selfish tight a$$ed bastards!
not to mention their customer service stinks, ask them about a game and they scoff at you.
no hi how are you?
or how did you like the game?
you walk in, they scan the game tell you the price and thats about it.
the price is basically the only words coming out of their mouth.
customer service has gone down the sh*tter latley.

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