GameStop CEO- faltering industry sales are normal for “end of the console cycle”

Tuesday, 31 July 2012 17:39 GMT By Stephany Nunneley

GameStop CEO Paul Raines has said the lull in sales of packages products is just par for the course due to an extended console cycle.

Speaking with Gamespot, Raines said sales always perk back up during the holidays, and with Wii U coming out soon, “hopefully next year we’ll see,” Microsoft and Sony step up to the plate.

“I think the fall and holiday is where we expect to see improvement, and the Wii U is a big part of that,” he said. “As we think about the Wii U, we think that’s a very significant player in what could happen at holiday. Certainly, the first half of this year has been tough on the NPD data. I would also caution everyone that [those] six months represent a third of the year sales-wise.

“So the media has had a field day, and investors have really been spooked by the NPD data. But we still have most of the sales year ahead of us and there’s a lot of positive signs.

“If you look at our financials for the first quarter, the extension of the console cycle has driven us; it’s put pressure on the top line, it’s put pressure on hardware sales in the industry. If you go back and study console cycles, although this is the longest we’ve seen, this is what happens at the end of a console cycle.

“We think this new console cycle that’s emerging with the Wii U and hopefully next year we’ll see more [Microsoft and Sony], is going to be typical of what we’ve seen.”

Raines doesn’t think the industry will ever reach a point where “boxed games cease to exist,” as future consoles will provide “unbelievable new capabilities for rendering, speeds, et cetera, which will require physical games.”

“At the same time, the digital business is growing,” he said. “The digital console is the fastest part of the digital business for us. So we’re preparing for that through the investments we’ve made in digital spaces. As far as used, we continue to believe there will be a preowned business for a very long time.

“We think the next consoles will support [used games] and we’re planning accordingly. We also believe there is room for a preowned electronics business.”

Wii U is out this holiday season, and Microsoft and Sony are both rumored to announce new consoles in the works sometime next year.