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Analyst: Core Gamer Likely Led GameStop To Strong Holiday

It was likely a good holiday for GameStop, says Wedbush analyst Michael Pachter -- even despite heavy discounting from online and big box stores enticing the casual consumer.
The recent holiday season brought with it the annual retail scramble for gamer dollars, and industry analysts saw many larger stores offer heavy promotions in the hopes of luring consumers away from specialty stores like GameStop. But Wedbush analyst Michael Pachter says that when GameStop reports its holiday sales results later this week, he doesn't expect to see a meaningful loss of holiday marketshare for the company. In the analyst's view, GameStop has cornered the core market. Further, the company faces an easy comparison versus last December, one against which it seems likely to show growth, given the strong performance of this season's launches. "We believe the mass market merchants fought over casual gamers, while GameStop’s focus on core gamers helped immensely with two solid product launches," he says. "Robust sales of Activision’s Call of Duty: Black Ops and Microsoft’s Kinect likely allowed GameStop to bank sufficient early sales during the holiday period to achieve its guidance with only modest comps required for the balance of the quarter." The company had been highly enthusiastic ahead of the holiday. The company's executive chairman Dan DeMatteo said he felt the environment around Sony and Microsoft's new motion control solutions reminded him of early Wii fever. GameStop would likely not be as willing as Pachter to assign the casual consumer to big box and online retail however: In particular, the company credited part of its anticipated holiday success to more casual and family gamers enticed into its stores by accessible Kinect and Move.

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