GameStop Digital Sales Grow by 57%, 4th Quarter Income Drops

GameStopGameStop has recently reported that, for the fourth quarter, total sales came down to $3.58 billion, a decreases from $3.69 billion over the same time period last year. Net earnings have also seen a dip, dropping from $237.8 million to $174.7 million.

Comparable store sales decreased by 3.6% compared to this quarter last year. However, digital sales by the retailer has seen a rapid growth, growing by 57% in fiscal year 2011 ending January 28, 2012.

As for the entirety of fiscal year 2011, GameStop earned a total of $339.9 million, down from $408 million.

Analysis: With the convenience that digital distribution provides, it’s no surprise that GameStop would attempt to change their business practices to stay relevant in an industry that’s undergoing a radical change. This is especially true in a market where services like Steam and Origin, stores like BestBuy and Wal-Mart, and web sites like Amazon are all competing for the same customers. 2012 appears to be the transition year for the company, and this would most likely explain the decrease in their numbers across the board.

But with the company acquiring Impulse, Spawn Labs, and Kongregate, combined with the retailer now offering downloadable PC games from their web site, GameStop is certainly aware of where the industry is heading. GameStop CEO Paul Raines has said that he’s expecting better results this year, but I’m not too sure of this. Simply put, there are far too many other options that gamers have open to them to obtain their games and from companies that they simply like more.

As we recently reported, the numbers outside of retail sales are very strong, and I can only see this trend continuing over time. Simply put, GameStop will still enjoy a large amount of success, but not as the dominating force they appeared to be only a few years ago.

Nathan Wood

About Nathan Wood

When he picked up a controller on that fateful day at the age of 6, Nathan had no idea how quickly it would captivate him. Enjoying a wide range of games, he is up for anything as long as it is of good quality, interesting or laughably bad. When not playing or writing about video games, he enjoys music, film, basketball and art. He is currently completing his last year of his IB diploma before mastering the great land known only as: University.