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GameStop: PS3, 360 Sales Double On Price Cut, No End To Wii Shortage

In the call following its record Q2 earnings report, GameStop said PS3 and 360 sales doubled since their respective price cuts, Wii shortages will continue, refurb sales are up as t
In the call following its record Q2 earnings report, GameStop said PS3 and 360 sales doubled since their respective price cuts, Wii shortages will continue, refurb sales are up as the company deliberately buys broken consoles, and, curiously, Madden '08 GameCube sold 6000 copies last week. PS2, GameCube Still Moving 'Trailing systems' are still continuing to show a strong following, said company chairman and CEO Richard Fontaine, on the "amazing" Madden results, adding that he believes GameStop may have been the only retailer to purchase the GameCube version of the title. The PlayStation 2, too, is still showing good results for GameStop some seven years after its introduction, with executives marveling that its sales were barely down over last year, and noting that software continues to do "extremely well." Broken Consoles Showing Good Margins Executives also noted that GameStop has increased spending on refurbishment of used hardware, and, in fact, have begun "instructing stores to intentionally buy defective consoles," doubling its refurbishment production over the quarter, in an effort to battle the "slight" margins on new hardware sales. Price Drops Moving Consoles Price drops have begun moving more hardware at a faster clip, the company noted, with the PlayStation 3 showing double unit volume sales since it saw a price reduction, which the company notes has continued up through and including last week. GameStop says it expects that will continue as the platform gets system exclusives Lair and Heavenly Sword. The same goes for the Xbox 360, which has seen double the console sales across all three of its configurations, and sales of the PSP increasing 50 percent since its own price drop, so much so that the hardware is in short supply, which executives said should continue through the release of the new PSP slim model. Looking at the Wii, GameStop said the consoles is still "selling out immediately" some 9 months after its debut. Company COO Dan DeMatteo said that "supply has ramped on a weekly basis throughout the quarter," and that the company was "getting a shipment every week," but based on the tentative schedule GameStop was provided by Nintendo, the Wii was "going to be short supply throughout the year." Holiday Games Fill GTA Void Looking at the company's third quarter, though clearly disappointed by the delay of Grand Theft Auto IV, GameStop said the void left in the back half of the year should still be adequately filled with other titles. Halo 3 in particular is expected to break industry sales records, as well as Madden 08, which is expected to break franchise records. Call of Duty 4, Mass Effect, Assassin's Creed, Guitar Hero 3, the PS3 releases Lair and Heavenly Sword, and the DS release of Legend of Zelda all were also specifically called out as second half best sellers. GameStation Acquisition Not Off The Table Finally, following news that UK retailer Game's planned purchase of all GameStation retail outlets has come under monopoly scrutiny, Fontaine said he was watching developments with 'interest.' Admitting that the company didn't know "where GameStation is going to go," and that the process will "take a number of months," Fontaine said he would "certainly state that if an opportunity arose we would have an interest," but that it was "mainly up to regulatory authorities to determine if we or anybody has an option to pick up that should there be forced dissolution."

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