GameStop sales were at $1.73 billion in the second fiscal quarter of 2014, according to a Gamestop release. Where are those billion dollars coming from? In large part thanks to strong interest in the PlayStation 4 and Xbox One.
The largest video game retailer in the United States says in its report that new hardware sales increased by 124 percent in the year's second quarter, attributing the numbers to high demand for Microsoft and Sony's latest gaming consoles. Sales for the second quarter of 2014 are up 25 percent from second quarter 2013, which brought in $1.38 billion.
Two of the summer's biggest game releases -- Mario Kart 8 and Watch Dogs -- helped push software sales up 15.6 percent over last quarter. Gamestop also saw a 5.5 percent increase in pre-owned game sales, the primary source of Gamestop's income.
While Gamestop is still very much a video game retailer, the company has been branching off into selling other electronics, including smart-phones and tablets with new stores like SimplyMac and Spring Mobile. Gamestop says that sales in the mobile and consumer electronics category rose 85.1 percent, with the Technology Brands part of the company contributing 19 percent of the company's total second quarter profit.
"The second quarter demonstrates the power of the new console cycle and all of our business units, including Technology Brands, positively contributing to the company's sales and profits," Rob Lloyd, chief financial officer for Gamestop, states in the earnings report. "The back half of the year is filled with exciting games and products coming to market and I am confident that we are prepared to capitalize on these opportunities."
This earnings report comes a few weeks after it was announced GameStop would be overhauling its game trade-in system to be simpler and offer more base compensation for those trading in their games, whether for cash or for in-store credit. The current 10-tier trade-in system will be replaced with a new, easier-to-understand four-tier system.
"We heard from customers that they want a better way to understand the value of what they sell to GameStop and this new initiative is a way to deliver on that feedback," said GameStop's senior vice president of pre-owned business Jason Cochran in a press release.
Rumors also began to spread that GameStop would be unveiling a credit card tied to its PowerUp Rewards program. Users of the card would receive more PowerUp Reward points, which can be used to buy various geeky products from the PowerUp catalog. That card is rumored to feature a steep 26.99 percent interest rate, nearly double the current market average interest rate of 13 percent. If that is the case, and with a strong lineup of hot new games coming this holiday season, expect GameStop's third quarter profits to soar even higher.
