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Wii

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

by Patrick Barnett - January 11, 2012, 2:47 pm EST
Total comments: 39 Source: http://www.gamasutra.com/view/news/39535/Lack_of_n..., (Gamasutra)

GameStop took in just as much money during this year's holiday season as they did last year.

Gamestop blamed both Wii software sales and overall hardware sales as the reason for their flat numbers this holiday.

Over last year's holiday season GameStop brought in $3.02 billion; this equals 2010's holiday sales. GameStop claimed that hardware sales dropped 19.6 percent, but PS3 and Xbox 360 software sales rose 9.9 percent. No specific percentage was given in regards to the Wii's software sales, but due to GameStop blaming these sales as one of the reasons they did not earn more this holiday, it can be expected they were not good.

GameStop also reported that international in-store sales dropped by 1.5 percent, while US sales increased by 0.3 percent. Together, the result was a drop in in-store sales of 0.3%. After the holidays, GameStop was able to reduce its losses of store sales from 2 percent to 1 percent.

Talkback

NintendoFanboyJanuary 11, 2012

So u DIDNT make MORE money then last year, thats Nintendos fault?
How about they Sell there own games and system and leave u out next year.
Maybe then you will make a profit, oh wait.....

MorariJanuary 11, 2012

It can't have anything to do with GameStop's deceptive business practices and annoying in-store shills!

xcwarriorJanuary 11, 2012

I blame too many gamers who are still using Gamestop. Power to the people, which means stop using this over-priced on used games mark up retailer!

Chozo GhostJanuary 11, 2012

Thank you, Wii, for being a thorn in the side of these assholes! Yeah!

Seriously though, this is just Karma. I don't think there's anything more to it than that. The Wii is just a convenient scapegoat in all this.

Ian SaneJanuary 11, 2012

Now watch, Gamestop's all pissed and "that's it!  We're pulling out of that Xenoblade crap!" ;)

Evan_BJanuary 11, 2012

Yes, because if you don't do better every single year, that means you're not becoming a better company.

In any case, I'm not surprised that they blamed the Wii- it's a shitty console with not good games in sight, bar Xenoblade.

TJ SpykeJanuary 11, 2012

Quote from: Evan_B

Yes, because if you don't do better every single year, that means you're not becoming a better company.

This is not unique to GameStop or even video games in general, investors get mad at ANY publically traded company that doesn't see a increase in profits each year (hell, sometimes they get mad even when they do have a profit, but not as much as they expected).

MagicCow64January 11, 2012

Quote from: TJ

Quote from: Evan_B

Yes, because if you don't do better every single year, that means you're not becoming a better company.

This is not unique to GameStop or even video games in general, investors get mad at ANY publically traded company that doesn't see a increase in profits each year (hell, sometimes they get mad even when they do have a profit, but not as much as they expected).

The contradictions of capitalism continue apace! Only a madman or an economist believes in infinite growth on a finite planet.

bhurakJanuary 11, 2012

Quote:

The contradictions of capitalism continue apace! Only a madman or an economist believes in infinite growth on a finite planet.

Are you suggesting it was the finite resources of the planet that held Gamestop back?  That seems like the position only a madman would take!


Seriously, the industry has grown from 3.2 to 18 billion dollars in the US alone from 1995 to 2007 - finite economic thinking cannot explain where this comes from!


Now if a company doesn't want to be beholden to shareholders (and many companies probably should not!) then they don't have to be publicly traded.



MagicCow64January 11, 2012

Quote from: bhurak

Quote:

The contradictions of capitalism continue apace! Only a madman or an economist believes in infinite growth on a finite planet.


Are you suggesting it was the finite resources of the planet that held Gamestop back?  That seems like the position only a madman would take!


Seriously, the industry has grown from 3.2 to 18 billion dollars in the US alone from 1995 to 2007 - finite economic thinking cannot explain where this comes from!

I dunno, how many people would honestly still be in demand of a wii at this point, even if the software lineup hadn't flatlined? PS3 and 360 make more sense, as they're cheaper than ever, and the PS3 in particular has taken a while to build up steam. I guess you could argue that if the Wii had more going on, fewer people would be buying PS3s or Xboxes to fill the vacuum, but then Gamestop would have sold fewer pricier consoles.


Now if a company doesn't want to be beholden to shareholders (and many companies probably should not!) then they don't have to be publicly traded.

TJ SpykeJanuary 11, 2012

The Wii had a blockbuster November and December (500K on Black Friday alone), maybe they were bought at other place.

NinSageJanuary 12, 2012

I bet they would sell more Wii stuff if

A) they made sure the new Wii games were out on the shelves!
(can't tell you how many times that's happened to me)

B) they hired people who actually enjoyed games other than Call of Halo 4: Drake's Unvengence =P

Chozo GhostJanuary 12, 2012

Until a point is reached where everyone on the planet (7+ billion people) are gamers, then there is always potential for growth. Japan is a country that has probably reached the point its video game industry can't grow further, but North America and Europe are far from it, and the rest of the world like Latin America and Africa and so on have barely been touched at all. So while there may not be potential for infinite growth, we are very far from reaching that limit.

CericJanuary 12, 2012

Its pure capitalism why they didn't sell more Wii Units.  Why in the world would you buy a Wii from Gamestop when:

You could got to Target, buy a Wii at asking price, get an included game and Skyward Sword.

I never saw Gamestop ever do an equivalent deal, but you know who I did? Wal-mart, Best Buy, Etc.  Why buy Gamestop when you could get it cheaper somewhere else?

Chozo GhostJanuary 12, 2012

Quote from: Ceric

Why buy Gamestop when you could get it cheaper somewhere else?

I know that and you know that, but apparently there are a lot of people out there that don't. Why do people take a $50 game there and trade it in for a $5 store credit when they could sell it on ebay and get a lot more out of it? It doesn't make any sense.

TJ SpykeJanuary 12, 2012

Quote from: Ceric

You could got to Target, buy a Wii at asking price, get an included game and Skyward Sword.

That Target one was the gimped Wii, that could be one factor.

The kind of people who are buying Wiis at this point probably aren't in GameStop's primary demographic.

They're right in Walmart's though.

NinSageJanuary 12, 2012

Quote from: NWR_insanolord

The kind of people who are buying Wiis at this point probably aren't in GameStop's primary demographic.

Sure, but that philosophy's applicable to any platform.

O4EJanuary 13, 2012

I once had a game reserved there, and they screwed up the reservation, so i went to wal mart to buy the game instead that day. At wal mart the game was 10 dollars (before taxes) cheaper. Why would you shop at stores like gamestop over christmas where everywhere else is cheaper?

Chozo GhostJanuary 13, 2012

The only reason why anyone should ever buy anything from Gamestop is if what you want to buy can only be purchased there and no place else (Xenoblade Chronciles, I am looking at you).

NinSageJanuary 13, 2012

Quote from: O4E

I once had a game reserved there, and they screwed up the reservation, so i went to wal mart to buy the game instead that day. At wal mart the game was 10 dollars (before taxes) cheaper. Why would you shop at stores like gamestop over christmas where everywhere else is cheaper?

They did the same thing to my bro-in-law about the LE Skyward Sword.  They gave away his preorder because he was two days late picking it up... even though he CALLED THEM on day one and said I'LL BE BACK IN TOWN in two days DON'T GIVE AWAY MY COPY.

He showed up and it was gone... so he went to some other store, not sure if it was Walmart, and eventually hunted down a copy.

TJ SpykeJanuary 13, 2012

Quote from: O4E

I once had a game reserved there, and they screwed up the reservation, so i went to wal mart to buy the game instead that day. At wal mart the game was 10 dollars (before taxes) cheaper. Why would you shop at stores like gamestop over christmas where everywhere else is cheaper?

From my experience, Walmart is usually more expensive than any other store for video games (especially older games).

CericJanuary 13, 2012

Walmart use to be 2 cents cheaper on all games.

Mop it upJanuary 13, 2012

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 GhostJanuary 13, 2012

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...

CericJanuary 13, 2012

*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.)

Kytim89January 14, 2012

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.

martyJanuary 14, 2012

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.

broodwarsJanuary 14, 2012

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.

noname2200January 14, 2012

Quote from: Mop

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.

CericJanuary 14, 2012

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 upJanuary 14, 2012

Quote from: noname2200

Quote from: Mop

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.

noname2200January 15, 2012

Quote from: Mop

Quote from: noname2200

Quote from: Mop

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 GhostJanuary 15, 2012

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.

xcwarriorJanuary 15, 2012

Quote from: Chozo

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.

VariantX7January 15, 2012

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.

UncleBobRichard Cook, Guest ContributorJanuary 15, 2012

Quote from: xcwarrior

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.

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.

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