Gamestop Loses $270 Million in 2012

[Gahars]

Gamestop is a major player in the games industry. By catering to gamers and non-gamers alike, and promoting used game sales, it's managed to do pretty well for itself.

Key word is managed. It seems that the company is in something of a financial kerfuffle.

GameStop made a loss of $269.7 million in fiscal year 2012 as its progress in digital markets failed to offset the attendant costs and the decline of physical retail.

For the fiscal year ended February 2, 2013, GameStop booked revenue of $8.89 billion, down 7 per cent year-on-year from $9.55 billion. Comparable store sales were down 8 per cent overall, with new hardware, new software and pre-owned sales all declining.

Only the company's "Other" category, which includes mobile and digital sales, showed signs of strong growth, rising 21.2 per cent year-on-year.

However, that didn't stop the company from making a full-year loss of $269.7 million, down from a $339.9 million profit in fiscal 2011. The year's loss included $680.7 million in, "restructuring, impairment and debt retirement expenses."

Games Industry International

Yikes.

Now, it's not all doom and gloom. The company is expecting that the introduction of new consoles from Sony and Microsoft should increase game sales across the board. Still, the once mighty giant seems hobbled, if only just a bit.

So, what do you think? Is it Game Over for Gamestop? Or should I have asked, "Are they Gamestopped?"

 

[Jayro]

"Loses"... Right. You know how badly they rip people off for trade-ins? They don't lose shit. They simply didn't gain as much as they wanted, and call it a loss.

 

[FAST6191]

"debt retirement expenses"
Were they standard loans or variations thereof come due or voluntary payments I wonder (I probably could find out but hey). Similarly there is not much talk of any cash or assets hoard and as they are not franchised they likely have considerable land/lease assets.

As for what goes I will have to consider their competition and options for future sales/profit. That leads me to wonder what effect a new console launch will have on the same though as the last few years have done much in the way of big new games (despite my not being all that enthused by any of it).

edit @JayRo though I have certainly seen my share of creative accounting and that "debt retirement expenses" might be a variation on the theme (generally if you make a loss you can offset certain things to following years so ticking off a loan could make an apparent loss) the simple maths would probably appear to say "if income - expenses is less than 0 then you have made a loss".

Edit 2- I will note if my little corporate information page is anything to go by this information has been dug up quite late in the day (it reckons earnings hit about 3 weeks after the end of the financial year which was the start of February).

 

[GamerzHell9137]

I hate them.

 

[chavosaur]

Ah the trade in argument.
Have you ever watched Pawnstars? Or been to a pawn shop in general?
You go into Gamestop to trade in because you either have no use for the game anymore, or didn't like the game. Or you may be desperate for the new big game coming out, and really need some money to go toward it.
Its a general rule of all stores that you sell/trade something too, that THEY have to make a profit on what you give them.
In pawn shops, you go because you may be strapped for cash, or just wanna get rid of some old junk. Now, they're not going to PAY you what they will SELL it back for. They'd never make money. So you get a much lesser price then what the retail value is worth (this is where profit comes in)
Now let's keep this in mind. YOU don't have to trade your game in. It's your choice to do so or not, knowing full well you may not get a decent price for your item.
/rant

 

[Guild McCommunist]

"Loses"... Right. You know how badly they rip people off for trade-ins? They don't lose shit. They simply didn't gain as much as they wanted, and call it a loss.

Do you know how game trading actually works? They need to make a profit. So say for example you trade in a game that's retailing at $60 for $30. They need to pay their employees still so take a chunk out of each used game sale for that. Plus it's just taking up shelf space and what not. And they still need to make a profit.

It's the same practice to everything from antiques to Magic cards. Only gamers are such bitchy little girls about it.

 

[spotanjo3]

I do not care about GameStop.. they rip people off for trade-ins. Gamestop need to closed because of ripping people off anyway.

 

[chyyran]

I do not care about GameStop.. they rip people off for trade-ins. Gamestop need to closed because of ripping people off anyway.

Simple solution, don't trade-in your games at GameStop?

 

[chavosaur]

I do not care about GameStop.. they rip people off for trade-ins. Gamestop need to closed because of ripping people off anyway.

Yes yes, Gamestop is worse then the Mafia.
Are you one of these Bad-asses?

 

[WiiUBricker]

Serves them right. A company who wanted €50 for a used copy of Zelda Twilight Princess should GTFO.

 

[the_randomizer]

This sums it up pretty well I think

 

[Gahars]

ITT People don't understand the term "Middleman"

 

[the_randomizer]

ITT People don't understand the term "Middleman"

Guess not. Still, getting $25 back on a new $60 game is sure as hell better than paying $50 for a used game...oh wait.

 

[Gahars]

Guess not. Still, getting $25 back on a new $60 game is sure as hell better than paying $50 for a used game...oh wait.

...Your point?

 

[the_randomizer]

...Your point?

It's a ripoff. They don't need my business when it comes to used games; I can find those used games for a better price at Best Buy and Amazon. The fact they don't even give half the money for a new game when trading (and then sell a used game a near-full price) is a dick thing to do. Just saying.

Granted, while the Gamestop nearest to me has nice workers, their policies are far from friendly.

 

[DSGamer64]

Do you know how game trading actually works? They need to make a profit. So say for example you trade in a game that's retailing at $60 for $30. They need to pay their employees still so take a chunk out of each used game sale for that. Plus it's just taking up shelf space and what not. And they still need to make a profit.

It's the same practice to everything from antiques to Magic cards. Only gamers are such bitchy little girls about it.

To be fair, even if you trade in a game that is only a few months old, they give you less then 50% of the value that they are selling it for. A game that is still selling for 59.99, they are selling for 54.99 used 3 months or less after the game's release, some used games have their prices high for a lot longer though. The trade in value of the game would be 25 dollars in store credit. Yeah, it's not like they are even giving you cash, just the ability to spend what was originally your own money, at their store in a lesser value. So not only do you get a small fraction of what you paid for the game originally back, you are forced to get it in store credit.

At least I have the option of using Futureshop for game trade in's since they generally give more store credit for games and you can buy more then just games. I dislike how much EB Games/Gamestop rip customers off in terms of what they offer in trade in value and what they sell in the store.

 

[Gahars]

It's a ripoff. They don't need my business when it comes to used games; I can find those used games for a better price at Best Buy and Amazon. The fact they don't even give half the money for a new game when trading (and then sell a used game a near-full price) is a dick thing to do. Just saying.

For better or worse, they're charging what people will pay for.

And the concept of a middleman continues to elude you. Gamestop is buying the game from you so that they can, in turn, sell it to someone else. They need room for a reasonable profit, so they're not going to pay you what the game is actually worth. It's a tradeoff - you get less money, but it's more convenient and fast than taking the time to sell a game on your own. It's up to each individual to decide if it's worthwhile.

The responsibility lies on the customer to make an informed decision, not on Gamestop to grovel at your feet.

 

[Guild McCommunist]

To be fair, even if you trade in a game that is only a few months old, they give you less then 50% of the value that they are selling it for. A game that is still selling for 59.99, they are selling for 54.99 used 3 months or less after the game's release, some used games have their prices high for a lot longer though. The trade in value of the game would be 25 dollars in store credit. Yeah, it's not like they are even giving you cash, just the ability to spend what was originally your own money, at their store in a lesser value. So not only do you get a small fraction of what you paid for the game originally back, you are forced to get it in store credit.

At least I have the option of using Futureshop for game trade in's since they generally give more store credit for games and you can buy more then just games. I dislike how much EB Games/Gamestop rip customers off in terms of what they offer in trade in value and what they sell in the store.

Most other situations do. Do you really expect to trade in ANYTHING to retail and get more than 50% of what you spent back? They want to at least double their money, that's the general rule, so if they are selling a game for $55 used, they'll give $25 for it. They are a business, they're here to make money.

This isn't just towards games. I'm a big Magic player and this is the norm. No shop is going to buy a card for around the price it sells, especially considering how unpredictable the market can be, especially when new sets come out. A card speculated at $50 can go down to $15 easily. Hell when Return to Ravnica came out, one of their new cards (Jace AOT) went up towards $50. People where saying he'd be the new Jace TMS. Now he's $10. Imagine how much loss people got buying him for, say, $25, and not able to sell them out before the price dropped?

Same thing goes with games. If a game flops at retail, its prices drop too. Let's say Bioshock Infinite was a gigantic flop. You bought it opening day, beat it in say two days, and traded it in. They take the risk of giving you $25. The game could be half as much in a month. Hell I remember when Brink came out. It felt like within a month or two it was $20.

They take all the risk, you get to trade in a game you don't want/use towards getting a newer game. Everyone wins. People are just so braindead that they can't wrap their heads around that companies need to make money and that businesses do business. If you want more money for your games, sell them to your friends. They might give you $40 for your Bioshock Infinite when you're done if it's still $60 new and $50 used. Plus it's from a friend so it's reliable. Problem solved.

 

[Taleweaver]

Here's an idea...how about we all refrain from having biased or even judgmental opinions until we get some comparable sales numbers from other second hand game stores? As it stands, I have no idea whether steam is pulling market share, there is an oversaturation of used games (after all, the numbers only keep growing), that online registration and DLC discourages selling your games or that gamestop uses a bad business model.

I'm interested in that sort of thing. I really am. But all I'm seeing is people who had a bad deal on a game, and other people defending the reason for that deal. Sorry, but neither of those are convincing. Yes, if the second hand price is higher than the competition, you'll get your second hand game elsewhere...but that 'elsewhere' will be making less profit of them. As such, I want to know if 'elsewhere' is making profits or losses.

Call me back when you guys know, mmkay?

 

[Fishaman P]

I hope they go out of business and have used game sales so we can get our games back.

No joke, for over a year they were selling a used Pokemon Emerald for $40, which is more than it cost new.