GameStop Posts $488 Million Q3 Loss, Cuts Full-Year Outlook

GameStop Nov. 29 reported a third-quarter (ended Nov. 3) net loss of $488.6 million compared to income of $59.4 million during the previous-year period. Sales increased 4.8% to $2.1 billion from $1.98 billion last year.

The nation’s largest video game retailer attributed the loss to a non-operating, non-cash intangible asset impairment charge of $587.5 million, primarily related to goodwill and triggered by the sustained decline in the company’s share price.

Without the impairment charge, adjusted net income actually increased 24% to $68.3 million, compared to adjusted net income of $55.1 million in the prior-year quarter.

Indeed, pre-holiday comparable store sales increased 3.4% increase in the U.S. New hardware sales increased 12.8%, driven by demand for Xbox One X and Sony PS4. New software sales increased 10.9% driven by the strong slate of titles that launched during the quarter. Accessories sales increased 32.6% on the strength of headset and controller sales. Pre-owned sales declined 13.4%.

Digital sales increased 29.5% to $341.6 million driven primarily by strength in sales of digital currency.

Collectibles sales increased 11.7% to $154.6 million due to continued growth in both our domestic and international collectibles business.

Technology brands operating earnings increased 29.4% to $23.3 million compared to $18 million in the prior-year quarter, despite an 11.9% decline in sales to $171.1 million, primarily due to store closures relative to fiscal 2017.

“Software sales benefited from a compelling title line-up … including Red Dead Redemption 2and Spider-Man, as well as the earlier launch of Call of Duty,” COO/CFO Rob Lloydsaid in a statement. “We are especially pleased with our performance in October, a month where The NPD Group disclosed that the U.S. physical video game industry grew by 46% while our U.S. physical video game revenue outpaced the industry and increased 63% resulting in market share gains.”

That said, Lloyd cautioned about brewing storm clouds as current fourth-quarter sales are being driven by hardware versus higher-margin software.

“While our Black Friday and Cyber Monday sales were strong … the underperformance of certain titles, weakness in pre-owned and recent sales promotions, will result in fourth quarter earnings that are below our previous expectations,” Lloyd said.

The executive reiterated management is evaluating “all aspects of our business,” including store operations, cost structure, strategic and economic partnerships with publishing and platform partners, and relationships with customers and the services to “enhance our business and drive growth and profitability over the long term.”

Indeed, GameStop announced it sold 1,289 branded AT&T wireless stores for $700 million – proceeds it said would be used to pay down debt.

 

 

World of ‘Hotel Transylvania’ Expands With VR Book

Hotel Transylvania 3, the first Sony Pictures title to feature Quantum Storey VR Studio AR and VR content in its bundled movie release, will be the basis for the first standalone VR print book based on a major motion picture.

The standalone VR book expands upon the VR activity booklet sold with the title’s Blu-ray combo pack at Walmart. The project is a collaboration between Sony Pictures Consumer Products and the Quantum Storey Company, which uses patented technology to blend traditional publishing with augmented and virtual reality.

Readers will find themselves completely immersed in a 360-degree re-creation of the world of the film, allowing them to create a deeper connection to the characters.

“After seeing our customers enjoy Quantum Storey’s Hotel Transylvania 3 activity booklet that was launched last month, we are thrilled that they are bringing Drac, Mavis and the crew to life in a new and exciting way through this standalone VR Book,” said Jamie Stevens, EVP of worldwide consumer products for Sony Pictures Entertainment.

The Hotel Transylvania 3: Virtual Vacation VR book is now available at Walmart.com and Walmart stores in the book section, and includes VR goggles.

‘Searching’ Top Rental, ‘House With a Clock in Its Walls’ Top Seller at Digital Service FandangoNow This Week

Sony’s Searching and Universal’s The House With a Clock in Its Walls topped the rental and sales charts, respectively, at FandangoNow, Fandango’s digital content service, from Nov. 27-29.

Searching, the story of a father’s quest to find clues in the laptop of his 16-year-old daughter after she goes missing, was followed on the rental chart by Warner’s romantic comedy hit Crazy Rich Asians at No. 2 and The Meg at No. 3.

On FandangoNow’s sales chart, The House With a Clock in Its Walls, director Eli Roth’s adaptation of the children’s book starring Jack Black, was followed by Fox’s remake The Predator at No. 2 and Paramount’s Mission Impossible — Fallout at No. 3.

Top-Selling New Titles to Rent:

  1. Searching (Sony)
  2. Crazy Rich Asians (Warner)
  3. The Meg (Warner)
  4. Mile 22 (Universal)
  5. Incredibles 2 (Disney)

Top-Selling New Titles to Own:

  1. The House With A Clock In Its Walls (Universal)
  2. The Predator (Fox)
  3. Mission: Impossible – Fallout (Paramount)
  4. Peppermint (Universal)
  5. The Equalizer 2 (Sony)

1980s Miniseries ‘Key to Rebecca’ on DVD Feb. 12

CBS Home Entertainment and Paramount Home Media Distribution will release the TV movie The Key to Rebecca on DVD on Feb. 12, 2019.

Based on the bestselling novel by Ken Follett, the three-hour adaptation stars Cliff Robertson in the story of a British major determined to capture an elusive German spy during World War II. It originally aired in two installments in 1985.

WarnerMedia OTT Video Platform to Offer Three Service Tiers

WarnerMedia’s much-anticipated over-the top video platform launching in the fourth quarter of 2019 will include three levels of service: an entry-level movie-focused package; a premium service with original programming and theatrical movies; and a third service that bundles content from the first two plus an extensive library of Warner Bros., HBO and Turner programming and licensed content.

Speaking Nov. 29 at the telecom’s analyst day event in New York, CEO John Stankey, CEO of WarnerMedia said the company’s unnamed/unpriced SVOD service would complement existing business (i.e. HBO Now with 5 million subscribers); benefit current distribution partners; expand the audience and increase engagement around content; and provide data and analytics to inform new products and better monetize content.

Stankey said the SVOD service would be a combination of original content, movies, TV shows, library fare and third-party programming.

“It’s a software experience wrapping creative excellence, that we’re going to showcase specific brands … to help the consumer find the right kind of curated content they want,” he said. “It’s gotta be a great value proposition.”

Separately, CEO Randall Stephenson said the merger with Time Warner continues to take a lot of time …”Unfortunately, a lot of it involve[s] litigation with the government.”

The CEO was referring to the Justice Department’s decision to appeal an unfavorable federal judge’s antitrust decision approving AT&T’s $85 billion acquisition of Time Warner.

The U.S. District Court of Appeals in the District of Columbia is expected to rule early next year.

“We are well positioned for success as the lines between entertainment and communications continue to blur,” said Stephenson. “If you’re a media company, you can no longer rely exclusively on wholesale distribution models. You must develop a direct relationship with your viewers. And if you’re a communications company, you can no longer rely exclusively on oversized bundles of content.”

Indeed, AT&T’s core DirecTV pay-TV service suffered through one of its worst fiscal quarters, losing nearly 350,000 subscribers. The losses were offset to a degree by DirecTV Now, the standalone SVOD service with about 1.8 million subs.

AT&T warned that elimination of promotional pricing at DirecTV Now would likely result in negative net sub adds in the fourth quarter of 2018 and in 2019.

Amazon Studios Greenlights Shirley Chisholm Biopic Starring Viola Davis

Amazon Studios Nov. 29 announced it has acquired rights to The Fighting Shirley Chisholm, with Oscar-winning actress Viola Davis set to star in the title role as well co-produce.

Chisholm became the first black woman elected to Congress in 1969 – a seat she held until 1983. Chisholm survived racial harassment and assassination attempts in an unsuccessful bid for the Democratic nomination in the 1972 presidential election. Chisholm died in 2005 at age 81.

After recently inking a first look exclusive production deal with Davis and Julius Tennon’s JuVee Productions, The Fighting Shirley Chisholm further expands on Amazon Studios and JuVee Productions commitment to telling inclusive and impactful stories from established and new filmmakers of all backgrounds.

Co-producers include Stephanie Allain (Hustle & FlowDear White People) and Mel Jones under Homegrown Pictures, with Davis and Julius Tennon under their JuVee Productions banner.

Maggie Betts (Novitiate) will direct the screenplay written by Emmy-nominated writer Adam Countee (“Silicon Valley”, “Community”, “Mindy Project”).

Davis can currently be seen theatrically starring in Widows from director Steve McQueen and stars in Amazon Studio’s Troupe Zero, alongside Alison Janney and Jim Gaffigan.

 

 

British Regulator Calls on Country’s Public TV Broadcasters to Create Netflix Rival

With British-centric programming at the core of subscription streaming video-on-demand services such as Netflix, BritBox, Acorn TV and Amazon Prime Video, Sharon White, CEO of media regulator Ofcom, said the country’s public TV broadcasters should join forces to create a competing over-the-top video platform.

The United Kingdom represents the second-largest SVOD markets for Netflix and Prime Video.

Speaking Nov. 28 at the Outside the Box confab in London, White called on broadcasters responsible for popular series such as “Broadchurch,” “Bake Off” and “Blue Planet,” to combine existing OTT video platforms — BBC’s iPlayer, ITV Hub, All 4 and My5 — into a single service that could compete against Netflix and Amazon Prime Video more effectively.

“It would make it easier for viewers to access content across a range of devices, with a single login,” White said, adding that Ofcom has been encouraging U.K. broadcasters to collaborate and harness the power of technology to capture the audiences migrating online.

White cited the BBC/ITV collaboration around the 2017 launch of BritBox in the United States, which streams original series such as “Blackadder”, “Fawlty Towers” and “East Enders,” as a blueprint.

Indeed, Ofcom contends any joint venture hinges on the BBC — a prolific producer of original content for Netflix — which launched the iPlayer in 2007, the same time Netflix began streaming video with a branded Roku device.

“I remain convinced that collaboration is vital to the success of our industry,” White said.  “The sea-changes of recent years will not be the last. Nor can anyone be sure what competition and technology lie over the horizon. But while we cannot hold back the tide, our broadcasters can swim more strongly with it by working together.”

 

 

‘Johnny English Strikes Again’ Coming to Digital Jan. 8, Disc Jan. 22 From Universal

Rowan Atkinson (Mr. Bean) returns as an accidental secret agent in Johnny English Strikes Again, the third installment of the comedic spy series, arriving on digital Jan. 8 and Blu-ray, DVD and on demand Jan. 22 from Universal Pictures Home Entertainment.

English (Atkinson) and his sidekick Bough (Ben Miller) are back. When a cyber-attack reveals the identity of all active undercover agents in Britain, English is called out of retirement to find the mastermind hacker. A man with few skills and analog methods, he must overcome the challenges of modern technology.

The cast also includes Olga Kurylenko (Quantum of Solace), Jake Lacy (Carol) and Emma Thompson (Saving Mr. Banks).

Bonus features on disc and digital include:

  • “The Comedy Genius of Rowan Atkinson,” a look at Atkinson’s comedic talents;
  • “The Johnny EnglishLegacy,” in which the cast and filmmakers discuss how the character has evolved;
  • “Virtual Reality Johnny EnglishStyle”;
  • “The Gadgets,” in which Atkinson leads viewers through his notable collection of gadgets;
  • “The Cars,” about the use of autos in the film;
  • “Locations and Design,” covering the film’s set designs and locations;
  • “A Cast of Characters,” about the supporting cast; and
  • feature commentary with director David Kerr.

Dish Appoints Nallapati SVP and Chief Digital Officer

Dish has appointed Suma Nallapati SVP and chief digital officer, reporting to chief information officer Atilla Tinic.

Nallapati currently serves on Colorado Governor John Hickenlooper’s cabinet as Secretary of Technology and State CIO. She will join Dish in mid-January when Colorado Governor-Elect Jared Polis assumes the office.

Nallapati will lead Dish’s application delivery and digital strategy implementation. Her technology portfolio will include sales, e-commerce, customer and partner management, billing, and other various operational support systems.

“Suma’s mission is to ensure Dish is well positioned with the applications and platforms that deliver a best-in-class customer and employee experience for our current businesses, and set the stage for our future wireless business,” said John Swieringa, EVP and COO, in a statement.

Nallapati was appointed Colorado CIO, a state cabinet-level position, by Governor Hickenlooper in 2014. Prior to her role leading Colorado’s Office of Information Technology, Nallapati served Catholic Health Initiatives, one of the nation’s largest healthcare networks, as associate VP of service delivery. Nallapati began her IT career as a programmer for Dish in 1997. Nallapati was named “CIO of the Year” earlier this month by the Colorado Technology Association and was also named a 2017 Top 25 Most Powerful Women in Colorado honoree by the Colorado Women’s Chamber of Commerce.

“Suma always kept Colorado on the cutting edge of innovation,” said Governor John Hickenlooper in his announcement of Nallapati’s new role. “She guided us through many groundbreaking initiatives and provided a steady hand as we faced tough technology challenges. She will be a valuable addition at Dish.”

“Dish gave me the opportunity and encouragement to thrive in IT and I’m so thrilled to be coming full circle,” said Nallapati in a statement. “Dish was a vibrant entrepreneurial culture 21 years ago when I first joined, and as it moves to launch its first wireless network I’m pleased to see Dish continue to foster that spirit.”

She holds her master’s degree in nuclear physics from the Andhra University India.

Why Amazon Should Buy Barnes & Noble

When Amazon launched in 1994, founder Jeff Bezos envisioned his online bookseller competing against local stores and national chains such as Barnes Noble.

And for four years Amazon did just that: Sell books over the Internet more cheaply than anyone else – including Barnes & Noble, which remains one of the last-standing brick-and-mortar book (and packaged media) retailers.

Now Barnes & Noble is in financial trouble. It generated an operating loss of $26.7 million in the most-recent fiscal period. Revenue dipped 2% to $753.2 million.

The Nook segment – B&N’s attempt to compete with Amazon through a branded tablet device and digital (movies, TV shows, music) content – posted a $1.5 million operating loss. Revenue dropped nearly 17% to $21.7 million from $25.9 million last year.

The company hasn’t turned a fiscal profit in nearly two years. It is in litigation with its former CEO over inappropriate workplace behavior allegations and facing a make-or-break winter holiday period – at a time when sales should be booming.

As the retailer looks at “strategic” alternatives, including selling the company – Amazon, by comparison, is minting money.

Having long ago expanded beyond pulp fiction selling merchandise of every variety, in addition to Web services and retail grocery (Whole Foods), the company just posted its best-ever Cyber Monday, with customers ordering more than 180 million items through the five-day Thanksgiving weekend period.

Amazon ended the recent fiscal period with $56 billion in sales and profit approaching $3 billion.

Bezos is one of the richest, if not the wealthiest person on Earth. In 2013, he bought money-losing The Washington Post for $250 million – part vanity play and part attempt to support democracy.

Earlier this year the company became Mercedes-Benz’ largest single customer for the Sprinter van – a fleet order many speculate the company will use for local deliveries.

Acquiring Barnes & Noble would give Amazon 633 retail/distribution locations – many in prime mall locations.

The Amazon/Barnes & Noble store would have lots of cost synergies, including ramping up branded Amazon Go cashier-less convenience concept, showcasing the Amazon connected home (Kindle, Fire TV, Echo Dot, Ring doorbell, banking, etc.) – and selling books.