GameStop Corp. is the world’s largest retailer of video game products
and PC entertainment software. We sell new and used video game hardware, video
game software and accessories, as well as PC entertainment software, and related
accessories and other merchandise. We operate stores in the United States, Australia,
Canada and Europe, primarily under the names GameStop and EB Games. We also
operate the electronic commerce websites www.gamestop.com and www.ebgames.com
and publish Game Informer, the largest multi-platform video game magazine in
the United States based on circulation, with approximately 2.7 million subscribers.
Our goal is to strengthen our position as the world’s largest retailer
of new and used video game products and PC entertainment software by focusing
on the following strategies:
Continue to Execute Our Proven Growth Strategies. We intend to continue to execute
our proven growth strategies, including:
• Continuing to open new strip center stores in our target markets and
new mall stores in selected mall locations; and
• Increasing our comparable store sales and operating earnings by capitalizing
on industry growth and increasing sales of used video game products and our
Game Informer magazine.
Targeting a Broad Audience of Game Players. We have created a store environment
targeting a broad audience including the electronic game enthusiast, the casual
gamer and the seasonal gift giver. Our stores focus on the electronic game enthusiast
who demands the latest merchandise featuring the “hottest” technology
immediately on the day of release and the value-oriented customer who wants
a wide selection of value-priced used video game products. Our stores offer
the opportunity to trade in used video game products in exchange for store credits
applicable to future purchases, which, in turn, drives more sales.
Enhancing our Image as a Destination Location. Our stores serve as destination
locations for game players due to our broad selection of products, knowledgeable
sales associates, game-oriented environment and unique pricing proposition.
We offer all major video game platforms, provide a broad assortment of video
game products and offer a larger and more current selection of merchandise than
other retailers. We provide a high level of customer service by hiring game
enthusiasts and providing them with ongoing sales training, as well as training
in the latest technical and functional elements of our products and services.
Our stores are equipped with several video game sampling areas, which provide
our customers the opportunity to play games before purchase, as well as equipment
to play video game clips.
Offering the Largest Selection of Used Video Game Products. We are the largest
retailer of used video games in the world and carry the broadest selection of
used video game products for both current and previous generation platforms.
We are one of the only retailers that provide video game software for previous
generation platforms, giving us a unique advantage in the video game retail
industry. The opportunity to trade in and purchase used video game products
offers our customers a unique value proposition generally unavailable at most
mass merchants, toy stores and consumer electronics retailers. We obtain most
of our used video game products from trade-ins made in our stores by our customers.
Used video game products generate significantly higher gross margins than new
video game products.
Competition
The electronic game industry is intensely competitive and subject to rapid changes
in consumer preferences and frequent new product introductions. In the U.S.,
we compete with mass merchants and regional chains, including Wal-Mart Stores,
Inc. and Target Corporation; computer product and consumer electronics stores,
including Best Buy Co., Inc. and Circuit City Stores, Inc.; other video game
and PC software specialty stores located in malls and other locations; toy retail
chains, including Toys “R” Us, Inc.; mail-order businesses; catalogs;
direct sales by software publishers; and online retailers and game rental companies.
In addition, video games are available for sale and rental from many video stores,
such as Movie Gallery Inc. and Blockbuster, Inc. Video game products may also
be distributed through other methods which may emerge in the future. We also
compete with sellers of used video game products. Additionally, we compete with
other forms of entertainment activities, including movies, television, theater,
sporting events and family entertainment centers.
Competitors in Europe include Game Group PLC and its subsidiaries, which operates
in the United Kingdom, Ireland, Scandinavia, France, Australia, Spain and Portugal
and Media Markt, which operates throughout Europe. Competitors in Canada include
Wal-Mart, Best Buy and its subsidiary Future Shop. In Australia, competitors
include K-Mart, Target, Myer Department stores, Big W discount department stores
and Dick Smith electronics stores.
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