14 DAY TRIAL // GameStop, the specialist video game retailer, has announced a drop in both profits and revenues for the fiscal fourth quarter of the year while pointing out that it is still shifting its business model in order to incorporate digital distribution.
The company announced that, for the quarter that ended on January 28, it has managed to post sales of 3.58 billion dollars (2.71 billion Euro), a decrease over the same period of 2010.
When it comes to profits, the decrease was even more spectacular, with GameStop going from profits of 237.8 million dollars to 174.7 million during this fourth quarter (180.17 to 132.36 million Euro).
The results were in line with previous expectations coming from the company and also affected its yearlong results, which showed a slowdown in both revenue and profit.
The big highlight for the company was the increase of 57 percent in digital sales, which have reached an overall value of 453 million dollars (343.23 million Euro).
Paul Reines, who is the chief executive officer at GameStop, stated when the financial results were announced that, “In 2011, GameStop outperformed the video game market through disciplined execution of its core business and strategic initiatives.
“For 2012, we project operating earnings growth based on the continuation of our transformation, led by our strong pre-owned business, expanding digital offerings and emerging mobile categories.”
GameStop continues to be very dependent on its used game business, which has accounted for just 27 percent of total sales but brought in a full 46 % of its overall profit.
In order to beef up its digital presence, GameStop has bought the Impulse digital distribution platform from Stardock and rebranded it and then went on to acquire online gaming website Kongregate and to develop a streaming video game solution via Spawn Labs.
The company plans to better integrate retail and digital elements in its store during 2012.