GameStop Q4 Profit Skyrockets, Driven by E-Commerce

GameStop on March 23 disclosed fiscal results for the fourth-quarter, ended Jan. 30, which saw net income skyrocket 391% to more than $80 million, from a profit of $21 million in the prior-year period.

The increase was driven by a  175% rise in e-commerce sales, which represented 34% of net sales in the quarter versus 12% of in the previous-year quarter. Same-store sales increased 6.5%.

GameStop, the nation’s largest video game retailer, has been on a rollercoaster ride this year, the result of being in the crosshairs of third-party speculators manipulating the company’s stock price based little on actual performance and more on mob rule.

Revenue in the quarter dropped less than 4% to $2.122 billion, compared with $2.194 billion last year, reflecting an operating environment that included a 12% decrease in the store base due to the company’s “de-densification” efforts and a reduction of approximately 27% in European store operating days during the quarter in response to the COVID-19 pandemic. The company wound down operations in Denmark, Finland, Norway and Sweden.

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For the fiscal year, GameStop narrowed its fiscal loss nearly 55% to $215 million, from a loss of $471 million in 2019. Revenue declined more than 21% to $5.09 billion, from $6.5 billion.

“I am proud of how our entire organization came together in 2020 to adapt to the challenging pandemic environment, effectively serve our customers’ demand for gaming and entertainment products, and navigate through the year with strong liquidity and a strengthened balance sheet,” CEO George Sherman said in a statement.

Sherman said the retailer is off to a strong start in 2021, with same-store sales up 23% in February, led by global hardware sales.

“Our emphasis in 2021 will be on improving our e-commerce and customer experience, increasing our speed of delivery, providing superior customer service and expanding our catalog,” he said.

 

Video Game Publisher Take-Two Interactive Inks Long-Term Deal With Tiger Woods

Tiger Woods might not play golf for a while following his February car accident, but that doesn’t mean the sports icon can’t play virtually in video games.

2K, the publishing unit of Take-Two Interactive, March 16 announced an exclusive long-term partnership with Tiger Woodsone of the most celebrated figures in golf history. In addition, 2K announced it has entered into a definitive agreement to acquire privately held HB Studios Multimedia Ltd., developers of the commercially successful PGA Tour 2K21, as well as ‘The Golf Club’ franchise. The acquisition is expected to close in the first calendar quarter of 2021, subject to customary closing conditions. Financial terms of both deals were not disclosed.

Woods’ resumé includes 15 major championship wins; 82 PGA Tour victories; 11-time PGA Tour Player of the Year; lowest career scoring average and tied for the most career wins in PGA Tour history, among many other accolades. He is recognized as one of the greatest golfers of all time and is heralded among the most prolific athletes in the sporting world.

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Woods’ partnership includes rights for his name and likeness to appear exclusively in the PGA Tour 2K video game franchise, as well as any other golf games published by 2K during the partnership term. Woods will play an active role in the video game landscape as an executive director and consultant with ‘PGA Tour 2K,’ while 2K will also partner with Woods’ TGR Foundation, which provides STEM curricula and college-access programs to underserved students.

“In golf, there is no bigger icon than Tiger Woods. Like the rest of the world, we were saddened to hear of his recent accident, and we wish him a full and smooth recovery,” David Ismailer, president at 2K, said in a statement. “We have been eager to announce our partnership with Tiger, whose legendary career has transcended the sport. We are thrilled to have him join our ‘PGA Tour 2K’ series as an executive director.”

PGA Tour 2K21, a golf simulation game featuring PGA Tour professionals, courses, gear and apparel, has sold nearly two million units to date.

“Our work with 2K on PGA Tour 2K21 brought our capabilities and aspirations to the next level, and we can’t wait to show the world what we’re planning for the future,” said James Seaboyer, president and studio head at HB Studios.

 

NPD: February Video Game Sales Top Record $4.6 Billion

The skyrocketing ride for the video game industry shows no signs of slowing. New data from The NPD Group found that sales of games, hardware and accessories hit a record $4.6 billion in February, up 35% from $3.4 billion in the previous-year period.

The cross-category spike is due in part to year-over-year comparisons with a non-COVID-19 month versus the current climate that has seen a spike in gaming underscored by new consoles from Microsoft’s Xbox platform and Sony Interactive Entertainment’s PlayStation 5, as well as government-mandated isolation.

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Year-to-date spending was up 39% to $9.31 billion, from $6.7 billion a year ago. Hardware revenue increased 121% to $406 million, from $335.5 million. Notably, Nintendo’s Switch game unit outsold the PS5 in February, with unit sales and revenue rivaling the 2009 debut the Nintendo Wii.

Accessories spiked 41% to $195 million from $138.3 million, while packaged media and digital content revenue increased 30% to $3.99 billion, from $3.06 billion a year earlier.

The top-selling game in February was Nintendo’s Super Mario 3D World + Bowser’s Fury, which supplanted Activision’s Call of Duty: Black Ops Cold War.

 

GameStop CFO Exits, Stock Skyrockets

The rollercoaster Wall Street existence of GameStop took another surge skyward Feb. 24 — the day after CFO Jim Bell announced his resignation, effective March 26. The video game retailer’s shares surged up more than 100% to close at $91.71 per share. The volatility echoed recent market swings for the retailer after it became caught up in a high-profile battle between independent day traders and established hedge funds — the latter looking to short the stock; in effect betting on the retail chain’s demise in an era of online games and subscription gaming.

Bell had been recently criticized by activist investor Ryan Cohen, founder/former CEO of Chewy, for not being more aggressive pushing GameStop toward digital gaming. Cohen, 35, sold Chewy to PetSmart in 2017 for $3.35 billion. He is now reportedly the single largest individual investor in Apple.

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Diana Jajeh
Jim Bell

GameStop said that if a permanent replacement was not in place at the time of Bell’s departure, it intends to appoint chief accounting officer Diana Jajeh to the role of interim CFO. Jajeh has more than two decades of experience operating as an auditor, comptroller and corporate finance executive. After beginning her career at PricewaterhouseCoopers, she subsequently held senior roles at companies such as Visa and e.l.f. Cosmetics.

NPD: January Video Game Sales Reached Record $4.7 Billion

Strong video game sales momentum continued into 2021 as consumers seek hard-to-get new-generation gaming systems from Sony PlayStation and Microsoft Xbox. Consumer spending across game hardware, content and accessories reached a record $4.7 billion, up 42% from $3.3 billion in the previous-year period, according to new data from The NPD Group.

Hardware sales totaled $319 million, up 144% from sales of $131 million a year ago. Accessories sales totaled $222 million, up 73% from revenue of $128 million. Software sales reached $4.17 billion, up 36% from revenue of $3 billion a year ago.

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Top 20 January physical and full-game digital games based on dollar sales:

Rank December 2020 Rank Title Publisher
1 1 Call of Duty: Black Ops: Cold War Activision Blizzard
2 3 Assassin’s Creed: Valhalla Ubisoft
3 4 Marvel’s Spider-Man: Miles Morales Sony
4 5 Madden NFL 21 Electronic Arts
5 6 Animal Crossing: New Horizons* Nintendo
6 7 Mario Kart 8: Deluxe* Nintendo
7 19 Ring Fit Adventure Nintendo
8 26 Call of Duty: Modern Warfare Activision Blizzard
9 11 Super Smash Bros. Ultimate* Nintendo
10 8 NBA 2K21* Take-Two Interactive
11 10 Super Mario 3D All-Stars* Nintendo
12 14 FIFA 21 Electronic Arts
13 9 Immortals: Fenyx Rising Ubisoft
14 20 Mortal Kombat 11 Warner Bros. Interactive
15 12 Just Dance 2021 Ubisoft
16 17 The Legend of Zelda: Breath of the Wild* Nintendo
17 31 Minecraft: PlayStation 4 Edition Microsoft
18 2 Cyberpunk 2077* Warner Bros. Interactive
19 18 Super Mario Party* Nintendo
20 40 UFC 4 Electronic Arts
* Digital sales not included

 

Sony Looking to Further Bridge Anime, Movie, Video Game Markets

Sony is seeking to further meld anime, motion picture and video game markets through SVOD subsidiary Crunchyroll; a minority stake in Epic Games, publisher of the Fortnite game franchise; the PlayStation 5 game system; and other ventures.

Speaking on the Feb. 3 third-quarter fiscal call, CFO Hiroki Totoki said consumer interest in anime throughout Japan has increased 150% over the past five years, in addition to 19% worldwide year-over-year. Crunchyroll recently topped 90 million registered users and 4 million paid subscribers across more than 200 countries.

Indeed, anime movie sequel Demon Slayer: Kimetsu no Yaiba the Movie: Mugen Train, entered 2021 as Japan’s biggest box office hit, with more than $346 million in ticket sales through Jan. 5.

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“When the markets are growing, we try to enter such market to create our growth,” Totoki said. “But according to our internal investigation, those game players, the users that enjoy games and animation, it seems that there’s high level of affinity between these two groups.”

Totoki expects to see increased cross-selling opportunities in anime and gaming going forward. Sony’s recent $250 million investment in Epic includes development of movies and music. Epic is set to release its first animated feature film, Gilgamesh, directed by Tomas Lipgot, whose Spanish-language film, The Adopters, was recently acquired by Sony Pictures Television.

“That’s a new kind of entertainment in music and motion pictures for gaming,” Totoki said. “Consumer interest in Japanese anime is increasing rapidly, particularly outside of Japan. And as a company that currently owns both content and DTC streaming service, we have positioned anime as a focus area.”

Separately, Sony said it remains on track to meet a fiscal-year sales goal of more than 7.6 million PS5 units (4.5 million cumulative units sold through December) — despite ongoing console shortages due to a lack of semiconductors. Sony is projecting 14.8 million PS5 unit sales through the next fiscal year.

Total PlayStation user game play in December was about 30% higher than the same month of the previous fiscal year, according to Sony. At the end of December, 87% of PS5 users were subscribers to PlayStation Plus, the subscription platform affording users free access to games, multiplayer gaming, PlayStation Store store, and 100GB of cloud storage, among other features.

First-party PS5 title Marvel’s Spider-Man: Miles Morales, recorded sales of 4.1 million units through December.

“We had more game software titles at the launch of the PS5 than at any previous PlayStation console launch in our history, and those titles have sold well,” Totoki said.

 

NPD: December Video Game Revenue Skyrocketed 25%; Yearly Revenue Reached Record $57 Billion

The pandemic and new game systems helped drive December video game revenue to $7.7 billion, up 25% from $6.1 billion during the previous-year period. 2020 also set an all-time high in revenue with $56.9 billion, an increase of 27% from $44.3 billion in 2019, according to new data from The NPD Group.

The November launches of PlayStation 5 and Xbox Series X and Series S consoles contributed to hardware revenue jumping 38% to $1.35 billion from $978 million last year — the highest hard ware sales in eight years. The tally almost equaled $1.41 billion in hardware sales in 2019.

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While Sony and Microsoft hardware get the headlines, it was Nintendo’s Switch that quietly proved to be the best hardware seller throughout 2020 when it comes to unit sales and revenue. NPD said 2020 Switch sales were the best for a hardware device since the Nintendo Wii in 2008.

Accessories revenue spiked 15% to $546 million from $475 million last year. Accessories totaled $2.6 billion in 2020, up 21% from $2.14 billion in 2019. Sony’s DualSense Wireless Controller was the best-selling gamepad, while Turtle Beach’s Ear Force Recon 70 Gaming Headset Black for Xbox was the best-selling headgear.

Software sales in December rose 23% to $5.8 billion from $4.71 billion in 2019. Full-year sales jumped 26% to $48.98 billion, compared with $38.8 billion a year ago.

The top-selling title in December and 2020 was Call of Duty: Black Ops Cold War (Activision), followed by Call of Duty: Modern Warfare and Nintendo’s Animal Crossing: New Horizons.

 

LG Electronics Announces Gaming Pact With Google Stadia

LG Electronics is adding Google’s online gaming platform Stadia to its line of webOS smart televisions rolling out later this year. The deal — announced at the virtual CES 2021 — will enable smart TV owners access to popular games such as Cyberpunk 2077, NBA 2K21, Assassin’s Creed: Valhalla and Watch Dogs: Legion on their TV using the Stadia controller and without a requisite separate game system.

Stadia, which streams games directly to a desktop, laptop, cell phone, tablet or TV, is part of a growing wave of streaming-based platforms such as Nvidia’s GeForce Now, Microsoft’s xCloud and Amazon’s Luna looking to circumvent traditional game systems and offer content directly to consumers through CE devices.

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“Supporting Stadia on LG TVs is our commitment to customers that gaming is an increasingly important feature expected by LG TV owners,” Lee Sang-woo, SVP of at LG Electronics Home Entertainment Company, said in a statement. “Stadia is changing how people access their favorite games and by providing webOS compatibility, we’re making an early commitment to the platform.”

Stadia offers more than 130 games, with titles available individually or through a subscription to Stadia Pro.

 

‘Kingsglaive: Final Fantasy XV’ Coming to 4K UHD March 30 From Sony

Kingsglaive: Final Fantasy XV will come out on 4K Ultra HD March 30 from Sony Pictures Home Entertainment.

In the film, the magical kingdom of Lucis is home to the sacred Crystal, and the menacing empire of Niflheim is determined to steal it. King Regis of Lucis (Sean Bean) commands an elite force of soldiers called the Kingsglaive. Wielding their king’s magic, Nyx (Aaron Paul) and his fellow soldiers fight to protect Lucis. As the overwhelming military might of the empire bears down, King Regis is faced with an impossible ultimatum — to marry his son, Prince Noctis, to Princess Lunafreya of Tenebrae (Lena Headey), captive of Niflheim, and surrender his lands to the empire’s rule. Although the king concedes, it becomes clear that the empire will stop at nothing to achieve their devious goals, with only the Kingsglaive standing between them and world domination. Based on the iconic game, which has sold nearly 9 million copies worldwide since its launch.

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Extras include “A Way with Words: Epic and Intimate Vocals,” in which Aaron Paul, Lena Headey and Sean Bean — along with the filmmakers — reveal the process of creating the vocals for this film; “Fit for the Kingsglaive: Building the World,” an in-depth exploration of imagining and designing the world of the film;  “To Capture the Kingsglaive: The Process,” exploring the intricate process of capturing the physical performances at the heart of this computer-generated film; and “Emotive Music: Scoring the Kingsglaive,” about the creation of the score.

NPD: New Consoles Drive 35% Increase in November Consumer Video Game Spending

Spurred by a record $1.4 billion in hardware spending on new-generation consoles, November video game spending increased 35% to a record $6.97 billion, according to new data from The NPD Group. Sales of Microsoft Xbox Series X and Series S units, coupled with PlayStation 5, upped hardware sales 58% from $886 million from the previous-year period.

Hardware sales through 11 months approached $4 billion, up 34% from last year. Accessories increased 8% to $314 million, from $290.7 million. Year-to-date, accessory sales are up 22% to $2.07 billion, from $1.69 billion, driven by Sony’s DualSense Wireless Controller.

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Software revenue increased 32% $5.24 billion, compared with $3.96 billion last year. Year-to-date revenue is up 21% to $38.4 billion, from $31.73 billion. Activision’s Call of Duty: Black Ops Cold War was the top-selling title of the year, marking 13 straight years the franchise has topped annual software sales.

Through 11 months of the year, total video game spending is up 22% to $44.5 billion, from $36.47 billion last year.