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Best Buy reports catastrophic sales drop for games, yet Gamestop has best ever year. What’s going on?

By on March 24, 2011
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Best Buy has just reported its results for the year ended 26 February 2011. Revenue was down a fraction to $16.25bn.

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But the entry which caught my eye was this one, comparing sales of Entertainment Hardware and Software in the three months ended Feb 26 2011 with the corresponding period 12 months earlier (amongst analysts, this comparison is know as like-for-likes):

  • Domestic: -14.9%
  • International -9.9%

That’s a pretty catastrophic Christmas for video games.

Luckily it’s not entirely that bleak. GameStop also released results, showing like-for-likes up 4.8% (for the 3 months ending 29 January 2011). The growth by subcategory was:

  • New video game hardware: 5.9%
  • New video game software: 2.1%
  • Used video game software: 3.7%
  • Other: 14.4%

So Best Buy may prove to be an outlier. But for me, a collapse in video game sales of 15% for a major retail chain was quite a shock.

About Nicholas Lovell

Nicholas is the founder of Gamesbrief, a blog dedicated to the business of games. It aims to be informative, authoritative and above all helpful to developers grappling with business strategy. He is the author of a growing list of books about making money in the games industry and other digital media, including How to Publish a Game and Design Rules for Free-to-Play Games, and Penguin-published title The Curve: thecurveonline.com
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  • Mark Nebesky

    It’s possible BBY is becoming less relevant and losing mind share to game consumers. I would guess about 10 – 15% of the floor space is devoted to games versus TVs, PCs, audio, home appliance, accessories, etc. Add to that in most metro areas in the US you’re never too far from a Gamestop store. Their instant gratification on used games is a plus, despite being pennies on the dollar in value given back to the consumer.

    In the past year I’ve purchased only one game from BBY — CoD: BO on opening day. The game was nowhere to be found in the game section. Eventually I was clued in that it was being guarded in a cage behind the cash registers. Not exactly the best shopping experience I’ve had for a $60 product.