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

Tuesday, 31st 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.

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5 Comments

  1. Len

    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.”

    Err…what?!?!?!

    #1 2 years ago
  2. Gheritt White

    “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.”

    This is true.

    “As far as Used, we continue to believe there will be a preowned business for a very long time.”

    This is wishful thinking.

    #2 2 years ago
  3. Dragon246

    Used game sales suck.That why I like games having online trophies which can only be earned if you buy an online pass.

    #3 2 years ago
  4. NocturnalB

    @2 Maybe it is wishful thinking, but for it to HAVE to be wishful thinking at this point ain’t right. To me, having to have online passes and codes and crap like that is bs.

    Used games are for the average gamer trying to survive in this economy and still get his gaming fix too. Sometimes $60 is too much for a game (especially this late in a console cycle when “most” triple A titles have closed shop on current consoles).

    If production costs weren’t such a problem for dev’s, and they had more control over their own pricing, games wouldn’t be $60 a game (not to mention the little guy studios wouldn’t have to either die or be absorbed into the behemoths like EA, Activision, etc), thus average joe could put that $10-$30 he was going to put into a used game into a NEW game.

    Then the greedy bastard(s) who thought up “online passes/codes” could go fly a kite. It’s all about the $$$.

    #4 2 years ago
  5. Ajdragonis

    Thing is, it’s not just the money that they are after for those games. The online passes and such and the activation codes that are rumored about being implemented for the PS4 as also being used as a way to combat piracy. If a game contains on it and transmits a 100 character long alpha numeric code when you place it into your system that then registers to your account, two things happen. That game can not easily be pirated because you can’t manually enter that code, and if it is not present or already registered, you can’t play the game or at least not the full game. But secondly… that game can no be sold second hand because the code is already used.

    Of course, all this is assuming that the companies don’t just say screw it and move entirely over to digital distribution for all titles.

    #5 2 years ago

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