Topic: Wii Blamed For GameStop's Lack of Growth Over the Holiday

[Mop it up]

I don't know how anyone could make $3 billion+ for one period and complain that they couldn't do better next time. The fact that they matched it seems good enough.

I also like how GameStop doesn't question whether or not they could have done more to sell Wii games. The stores around here advertise PS3 and XBox 360 stuff like crazy, but Wii stuff is always in the back of the store and rarely has adverts out anywhere. Even the 3DS was given this treatment before the price cut. It's like they expect this stuff to magically sell itself.

[Chozo Ghost]

I think its just an Anti-Nintendo bias. I don't know why, but if you ever read any video game magazine (except Nintendo power, obviously) you get the impression the editors are biased against Nintendo. It also seems like all the video game "analysts" hate Nintendo too, becuase they always predict that Nintendo is "doomed" even when the facts show otherwise. Oh and how could we forget all the 3rd party developers who either give Nintendo platforms shovelware or nothing at all? So its not just Gamestop... it just seems like the entire video game industry in general has it out for Nintendo. But maybe that's just my impression...

[Ceric]

*shrug*
Nintendo is the USA or the Microsoft OS Division of the Gaming sector.
Very successful to the point that no one sees any reason to say anything positive or give any slack to them.  No news means things are going well.

Though like the other two example that might not really be the case (N64, Cube, VB, etc.)

[Kytim89]

The Gamestop near my home is selling a copy of Goldeneye 007 for the Wii for about $25 and I can get it from Amazon for about $15, and that includes shipping and handling. Long story short, I prefer to buy my used games off of Amazon because the price drops much quicker.

[marty]

For the record, I hate Gamestop to the point where I won't go into any of their terrible stores.

GS profits most from high turn-over (people buying and selling games).  When new Wii games aren't replacing old Wii games, there isn't going to be a lot of turn-over.  It's not GS fault that there aren't new Wii games that people want to buy.

I'd also like to point out that Nintendo hasn't released much this year and 3rd party sales didn't skyrocket.  I think this should definitively prove that Nintendo's 1st party offerings don't hurt 3rd party sales.  In fact, I'd wager that the exact opposite is true--the more good games there are, the more games people will buy for that system.

[broodwars]

Wii is the best-selling hardware and software-selling console this generation, so it had the greatest pull on GameStop's profits.  The Wii had a good year in 2010, and it had an abysmal year last year with very little software.  It's kind of amazing, actually, that Gamestop merely failed to grow last year considering that the entire industry was down in 2011 compared to 2010.  People don't like hearing Nintendo blamed for things, but that's what happens when your console is the supposed market leader and doesn't have a great year.  Some people seem to love Nintendo being praised as the market leader when times are good, but they can't take Nintendo being blamed as the market leader when times are bad.  Sorry, but if you don't like that then you'd better hope Nintendo stops being the market leader.

[noname2200]

I don't know how anyone could make $3 billion+ for one period and complain that they couldn't do better next time. The fact that they matched it seems good enough.

Like someone else pointed out earlier, the market generally expects companies to constantly grow. Makes perfect sense from the market's perspective, but it does constantly lead to anamolous situations like this, or even times when a company didn't grow enough.

Since the drop in the American videogame industry does seem to be primarily attributable to Nintendo,* it's no surprise that a game retailer would blame Nintendo for its flat performance. That said, I'm not shedding too many tears for ol' Gamestop.

*Based on my casual glance at the December NPD figures.

[Ceric]

Yeah, there is one really big problem with our form of Capitalism.  Companies should continue to grow.  Yes that is true, but you shouldn't measure that by Profits alone.  I company that makes no profit because it reinvested all of it into the company in my mind is being setup for success more then that company the fired 5 people just to edge them over last years profits.

[Mop it up]

I don't know how anyone could make $3 billion+ for one period and complain that they couldn't do better next time. The fact that they matched it seems good enough.

Like someone else pointed out earlier, the market generally expects companies to constantly grow.

I know, but as a later "finite growth" comment pointed out, it doesn't make sense. Also, GameStop isn't the only store that sells games, so maybe more people started shopping at other stores or online.

All I was saying is that there are many factors here.

[noname2200]

I don't know how anyone could make $3 billion+ for one period and complain that they couldn't do better next time. The fact that they matched it seems good enough.

Like someone else pointed out earlier, the market generally expects companies to constantly grow.

I know, but as a later "finite growth" comment pointed out, it doesn't make sense. Also, GameStop isn't the only store that sells games, so maybe more people started shopping at other stores or online.

All I was saying is that there are many factors here.

Regarding the first comment, based on my understanding of how the market works it actually makes perfect sense. Remember, the primary (not only) way most investors make money is for the stock price to rise, and that most reliably happens when the company's profits or marketshare grow. Once a company has established itself, like Gamestop has, steady performance isn't going to get more people to want the stock. This means current stockholders aren't really making (fast) money on their investment. Since they presumably could do better shifting their money to stocks that are growing, they will usually opt to do so.

This is why the market really only cares about growth, and why not meeting (even high) expectations is such a no-no. It's a structure that's divorced from reality and even long-term good for the company itself, but it's also how the game is now played.

Regarding people buying at other stores, NPD figures suggest that even a shift from Gamestop to other retailers isn't enough to offset the drop in Nintendo product sales. I suppose it's possible that online sales made up for that, since NPD data doesn't cover that market, but I'm personally skeptical.

Finally, and most important of all, even if Gamestop is completely correct and the Wii's sales drop is responsible for Gamestop's flat performance, I still consider Gamestop's performance to be exclusively Gamestop's responsibility. So no excuses!

[Chozo Ghost]

Gamestop needs to step up their efforts at ripping people off. Not every new game they have sold has been an opened clearly used copy, so there is still some room for improvement there. They should make sure each and every game they sell as new has been opened and used. They also need more product pushing. Gamestop employees should be armed with tazers and if a customer refuses to sign up to Game Informer they should be tazed repeatedly until they give in. These are just a few things Gamestop should do to help make more profit.

[xcwarrior]

Gamestop needs to step up their efforts at ripping people off. Not every new game they have sold has been an opened clearly used copy, so there is still some room for improvement there. They should make sure each and every game they sell as new has been opened and used. They also need more product pushing. Gamestop employees should be armed with tazers and if a customer refuses to sign up to Game Informer they should be tazed repeatedly until they give in. These are just a few things Gamestop should do to help make more profit.

This right here is post of the day!

But yeah, this is why I'm glad Nintendo is giving the option to buy Xenoblade from their store rather than Gamestop. How a company can get off selling you a used game for $5 less than a new version is just wrong. And why "gamers" in turn are dumb enough to do that is beyond me. Just go to any retail store where they put the new games on sale for $10 off and you'll save more and kill Gamestop at the same time. Ugh.

[VariantX7]

I love how Gamestop immediately blames Nintendo and just completely ignore the fact that Amazon, Best Buy, K-Mart, Toys R Us, and even Wal-Mart to a degree are giving customers actual incentives to shop with them.  Real incentives like discounts between 10 to even 50 percent off on the purchase of new games. Gamestop's competitors also offer rebates that are 10 or even up to 20 dollars off of their next purchase which may likely also come with a rebate as well which will continue to bring that customer back.  They're putting hooks into their customers without bs'ing them with buying into a rewards system that gamestop  that rewards the purchase of overpriced used games.  If you really look at it, all gamestop ever does is try to secure the "best" exclusive pre-order DLC for new games while everwhere else you save actual money to go towards new games which will ironically probably retail for less than the used versions that gamestop sells you for 100% profit.

[UncleBob]

Just go to any retail store where they put the new games on sale for $10 off and you'll save more and kill Gamestop at the same time. Ugh.

I'd like to suggest that *this* is why GameStop had issues with "sales growth".  Other retailers had some pretty amazing sales on games (and systems) this holiday season (which accounts for a rather large chunks of sales).  Even before the holiday season, other retailers has some pretty rocking deals and such.

Let's look at the 3DS.  Remember when it had a price drop?  Most major retailers allowed people to buy the system pre-drop (and get ambassador status) and return later to get a price adjustment.  Hell, Walmart even dropped the system price *early* to save everyone that hassle.

Meanwhile, GameStop refused to allow people to return for a price adjustment.  Thus, the other retailers moved a LOT of 3DS units in the week before the price dropped... and I'd be surprised if GameStop accounted for 5% of those sales.

This being just one example.  BestBuy, Toys R Us and Walmart each had some kind of promo with Skyward Sword the week it went on sale.  What did GameStop have?

The week Mario Kart 7 came out, TRU ran all games Buy One, Get One Half Off... a friend and I went in and price matched this at Walmart to get two copies of MK7.  GameStop won't even consider price matching.

GameStop is merely looking for someone else to blame their lackluster performance on rather than their own inability to adapt to the market.

[MegaByte]

According to NPD, new retail sales were down 21% in December and 8% for the year, so I'd say Gamestop actually did very well to come out even.