Top US retailers announce strong Q3 results

Leading North American videogame retail chains EBGames and GameStop have announced their results for the third fiscal quarter, with both firms showing strong revenue growth and projecting further gains in Q4.

EBGames remains the larger of the two chains, with revenues of $446 million in the October quarter, a rise of 37.4 per cent over last year's figures, while GameStop reported $416.7 million revenues - up 28 per cent.

However, GameStop was more profitable than its rival, with net income up 29 per cent to $13.8 million, compared with EBGames' $7.3 million income figure - although that's up from only $1.5 million last year.

Both companies announced similar growth in software sales and comparable store sales - EBGames saw growth of 35 per cent in software sales, compared with 36 per cent for GameStop, while comparable sales went up 13.8 per cent for EB and 12 per cent for GameStop.

Much of the difference between the performance of the two companies during the quarter came down to EB's more aggressive store opening campaign - EB's chain grew by some 140 stores over the course of the quarter, while GameStop opened 72 new locations.

Overall, the outlook for both companies is healthy - and taken as a barometer for the overall health of the games industry leading into the final, and largest, sales period of the year, these figures give a very positive outlook on the situation.

Indeed, both companies added strong projections for Q4 to their results, with EBGames expecting same store revenues to grow 4 to 6 per cent, and GameStop expecting 6 to 9 per cent growth.

"We are very pleased to report impressive third quarter results that again outperformed the industry as a whole," commented EBGames president and CEO Jeffrey Griffiths. "We significantly expanded both our top and bottom lines, highlighting the strong performance that can be generated when our business model is complemented by a positive industry environment."

"We demonstrated gains across all areas of our business," he continued. "These gains were fueled in part by better than anticipated new release performance as well as the early launch of Sony's new PlayStation 2 model. In addition, we continued to make progress on our initiatives to grow our higher-margin pre-played category and international business."

For his part, GameStop chairman and CEO Richard R Fontaine praised the strength of the line-up from publishers during the period. "Nearly every new game released during the quarter exceeded our expectations," he said, "showing the overwhelming demand for video game products and how our new and used model helps us to grow market share and customer demand. The launch of the new PSTwo in early October, coupled with the late October launch of the Xbox holiday bundle, drove hardware sales far beyond our original projections."