GameStop's quarterly earnings call took place yesterday, with the company revealing that total sales have dropped 4.3 percent to $1.97 billion, while hardware sales have fallen by 28.8 percent. The fall was attributed to the small number of AAA games in the first quarter of this year.
However, the company isn't dwelling too much on these drops, but instead wants to focus on the future - and the potential impact of forthcoming hardware launches including Nintendo NX and PlayStation VR.
Conservative projections on these products were offered, with a GameStop representative stating that the NX market "could" be worth $7.5 billion if the system does half as well as the Nintendo Wii:
Nintendo has confirmed that they will be introducing a new console in early 2017. So let's take a look at the potential for just that one new console. Once again, we're not projecting. We are simply looking at the potential for the new console in comparison to prior consoles.
Should the new NX perform only slightly better than the Wii U, it would generate 2.7 billion dollars in incremental sales over the first two years. Should it perform at even half of the level of the Wii, it would generate 7.5 billion units of incremental sales over that time frame. You can of course apply GameStop's market share to estimate the impact on GameStop's sales.
While it's too early to offer definitive projections, we are monitoring the situation closely in terms of product availability and features, consumer awareness and purchase intent. We plan to provide updates this quarter.
The rep also addressed rumours regarding NX abandoning discs for carts:
We saw these rumors, and of course we can't comment on them. I don't think we know anything about it anyway [about whether it'll be disk or cartridge-based], but certainly for us physical media is a good thing.
The only difference would be on the refurbishment and pre-owned side, and actually cartridges are much simpler to refurbish and repackage, so there's a little bit of an advantage in that direction.
But it's early, and we keep a cool head. Certainly I would say that there are rumors of that type, just confirms that this is an important console for next year, it will have physical media, we will play a role in it, our pre-owned business will also play a role, so we're excited about that, and of course we love Nintendo IP, so… it's all good news.
[source gamasutra.com, via dualshockers.com]
Comments 47
Of course they're hoping; their business depends on it. On my end, as a gamer, I'm hoping there will be backward compatibility. The Wii U's lifetime was waaaaaaaaay to short with too much potential wasted.
GameStop shouldn't worry too much, with PSVR and other VR devices + PS4 Neo and XB Scorpio, there'll be plenty of devices for them to sell irrespective of how NX does.
Of course it helps if NX manages to sell as well.
"US Retailer GameStop Hoping That Nintendo NX Can Arrest Decline In Hardware Sales"
It's dangerous to go alone! Take this.
Boy is gamestop gonna be dissapointed if the NX IS just some streaming device.
Then again, if it IS a streaming device, Nintendo should be worried to...
The NX is going to save hardware sales just like I'm going to be the Queen of England.
@TheGoof Gamestop did say the NX "will have physical media". Though I agree with the other commenters that Gamestop will probably say anything that helps justify their existence in a world of digital downloads and Amazon delivering to your doorstep
Personally I think that the fabled '100mil- 200mil console owners' isn't actually real, with a lot of gamers switching to PC or Mobile/iPad this generation. The numbers of PS4s and XB1s seems impressive but there has been a bit of slowdown recently where sales should be ramping up. What gives this away is the hardware updates with the PS Neo and XB1.5- why spend RnD money if there's still 60mil customers to buy the current machines? No, instead they want the first 40mil to upgrade, and not to price drop the current machines to try and sell them to casuals.
The NX can be a 'saviour' by appealing to people who don't yet own a 'next gen' console (The tablet market?), as the current console market is stagnant in it's customer base.
@SLIGEACH_EIRE I don't get it.
@Damo Really? Arrest, handcuffs? Hoping Nintendo alone can arrest hardware sales decline?
"It's dangerous to go alone! Take this." A very famous gaming quote.
https://en.m.wikipedia.org/wiki/It%27s_dangerous_to_go_alone!
Maybe I need better material.
@SLIGEACH_EIRE I got all that, just not sure what you were getting at
Oh please. With Sony, MS and VR bringing new stuff to the party, that is where their priorities are.
The Wii U did jack for their profits and now they are hoping the NX does something remarkable (like sell half of Wii hardware, 50m plus), without having ANY IDEA what the NX is about.
@Hotfusion Good point. Even if the NX has the same amount of power, as the PS4 Neo, will the market have moved on to VR (and even more so to mobile)?
@BaffleBlend Brace yourself, your majesty!
Not a big fan of that graphic at all, why mix consoles? Either have it 25% or 50% of Wii or 120% or 150% of Wii U. Why compare it to 2 different console numbers, all you are doing is making it confusing on purpose.
And the biggest problem with that number, it's based on sales comparisons at 2 different price points - Wii mostly sold at $250 and $199, Wii U at $349 and $299. So no matter how well NX sells they can't predict that increase in value unless they know how much it is. Cheaper consoles almost always sell better than more expensive ones. So if NX is a $400 Wii U 2 hybrid that sells 10m it generates the same revenue as a $200 NX handheld that sells 20m. Profits may vary based on number of units sold, but that graph is simple totals.
Surprised they didn't get laughed out of the room with that one.
As for Gamestop, I think the bigger question is how well they try to sell NX in store and online, if at all. March launch isn't prime retail time, and if Sony has PSVR, old cheap PS4 and new expensive PS4k Neo, and MS has old X1 and new X1.5, where is Gamestop promoting NX?
So, overall, that's about as useful as the MH handheld console report. Not at all.
@DaManLive 4 years and 3 months vs the typical 5 years is waaaaaaaaay too short?
@SLIGEACH_EIRE Wrong type of handcuffs, buddy. o.O
@Captain_Gonru Well to save you a new rag, NX will take up the minuscule Wii U space, and PS3 should be gone by then. But PSVR and the others are a concern as well. I think they'll carry Rift and the rest. And NX will probably be behind a huge wall of Funko Pop collectibles and jigsaw puzzles, so nobody will be able to find it anyway.
@rjejr I think they were trying to provide a range where they can expect their results to end up once the NX launches. If it does slightly better than the Wii U, here are the numbers that are the basement. If it does only half as well as the Wii, here are the numbers that are the ceiling. In other words, they expect to apply their profit share to a number falling somewhere between $2.7 to $7.5 billion. As it says in the article, it's not a prediction - they don't know enough to make hard predictions - it's just to illustrate what the potential might be.
@DoctorWily Yes, but to me, a sociologist and statistician by trade, it make no sense to compare NX to both Wii and Wii U, it's just adding more numbers that people have to think about, you need to know how well both Wii and Wii U sold to figure out those number. Just pick 1 and compare it to that. And if they have to use both, then make it simple - if NX sells like Wii - this amount, if it sells like Wii U, then this amount. And don't mix % and fractions, that's just stupid as well. Half and double, or 50% and 100%. The entire graph is rubbish.
I agree with @rjejr on this. If you want to show potential projections, you only detail from one concept. Don't detail from multiple different perspectives with multiple different price tags.
I am more interested in how confident they seem to guarantee physical media. They talk of physical new and physical pre-owned with even the slight comment, although speculation, of how cartridge is much easier to repair. I know how much they cannot, say however that sounds like a definite to me. And physical makes me happy.
@LordGeovanni I actually thought the cartridge or disc comments should have been the lead story myself. I've never thought NX Home would be download only, games are too big and broadband still too limited and or capped, but I'll leave the handheld open. PSPgo crashed and burned, but if the 3DS successor can download from the NX Home, like DS could download demos from the Wii, it might help mitigate some of that. I think having the handheld play the same cartridges as the NX Home is really the way to go, but I'm not ruling out download only on the handheld. 80% cartridges, 20% download only. Home is 100% on disc or cartridge.
@rjejr I have been thinking a lot myself. I love the aspect of downloading games and having all of them easily accessible. One thing I do not like a lot about download games is the control that I give up over the ownership of the games. I hope, and this is a course far reaching, but I hope I can put the discs or cartridges into the home system and download the entire game as a temporary measure to my portable. Even if it was only a week or a month at a time, it would allow me to have multiple games on me without having to risk losing them or switching them out every so often.
I doubt that would happen. However it is something I dream.
@LordGeovanni "I doubt that would happen. However it is something I dream."
I like the idea of buying a cartridge for NX then downloading a game to the handheld, but they still need a way for people to get the game who don't buy NX Home and only get the handheld. So that either has to be download only or a cartridge slot. Every game by 2017 should be available day 1 as a download. Though I still prefer my 20% off discs w/ Amazon Prime on new games, and cheap Gamefly used rental sales, and Redbox, too much to go all digital. But I do think it could work on a handheld, games are much smaller in stereo than surround sound, and a lower res screen - 720p tops I'd bet.
But currently I think NX Home and NX Handheld will have the same slot type. And really, why not?
No way is NX download only. Broadband access is hit or miss outside of major metro areas and many people have data caps with their provider. Then there is the question of storage space on the device itself, which Nintendo does not have a great track record of.
@rjejr
The two different concepts are either a small cartridge similar to the 3DS which would allow a lot of small cartridge use such as storing a lot in a very small area like the 18 game case Nintendo gave out with Club Nintendo.
The other option is to have a cartridge like the N64 or SNES. This would then be able to have a lot of additional storage built-in that's not being currently used. Then Nintendo could put a really great program in the annex and actually write code to the empty storage in the cartridge. You would be able to make a game cartridge completely filled with all the DLC and therefore not requiring any more space on the NX. I would love to see this happen, however I doubt Nintendo would do it. It would potentially open too many doors to Homebrew and piracy.
If Nintendo went with the "same slot in both", it would have to be limited to just small cartridge. Unless Nintendo did some type of double cartridge system, but I doubt that would work.
@rjejr lol, your comment is so true of my local GameStops!
I'm excited for a cheap Wii U.
@TheGoof Worried to what?
@LetsGoRetro What I meant to say is that it has the potential to last even longer than the usual 5 years as the PS3 and X360 did.
GameStop is the most boringest ass company on the planet. "Lets compare 2006 to 2016 on a different system and different retail market than it was before then talk about the future" it's like they just wanted to make a graph to remind everyone the Wii to WiiU sales comparison and try and say "we hope you do better because you ruined our revenue with the WiiU", not that they treat the bounty that is the 3DS with any respect. They throw all the boxes away and the section is always small and looks like a mess. But they sure have no problem giving a 10 foot wall to their fake dirty messed up green & black 360 & PS3 boxes for games people traded in with boxes.
If Gamestop wants the NX to succeed they better start using some of their own money to market it.
@LordGeovanni @rjejr
The 3DS cartidges can hold up to 8 GB, so with new cartidges released in 2017 16 GB and 32 GB should be feasible. Xenoblade Chronicles X reached 21 GB and I don't think many other Wii U games required more space. So, regardless of whether NX will be an hybrid or a home + handheld common ecosystem, I think 3DS-like cartidges will be the only medium for physical retail games on the NX.
@Mister_Wu Well from a strictly size perspective teeny tiny micro SD cards can be had for 64GB for $20 or 128GB for $30, so something as large as a 3DS game cartridge could probably easily hold 256GB if the price were right. Largest micro SD I've seen is 200GB for $80, normal SD has 256GB for $80 as well.
So however you look at it, size shouldn't really be an issue at all. Price might be, but not size.
@Dtbahoney
Seriously?
What the HELL do you mean what?
I'm sorry but it's too soon for streaming only consoles...
If the NX is a streaming platform... it won't work out THAT well.
If Nintendo does not work things out JUST RIGHT, the NX will be a BIG damn flop like the Wii U.
People claim that the Wii sold so well cause of the gimmick... it was not the gimmick alone.. it was the price tag.
If Nintendo does not plan things and do things just right, the NX won't sell very well just like the Wii U did not sell very well.
I feel like your response is out of proportion to my question. Are you under the impression that I think that the NX is going to be a streaming-only console? Or are you under that most likely false impression? I was pointing out that you misspelled "too". Go take a nap.
You people really dive into rumors with both feet.
@Dtbahoney
This from the grammar Nazi trying to point out that i spelled something wrong.
@JamesCoote
True.
And i never noticed them say that.
I hope nintendo knows what they're doing this time around..
@LegendOfPokemon not necessarily, as I have found out, people fluctuate and rarely stay with the same brand, unless they care about a certain brands success. so if NX does something, I'm guessing 30 Million might be a good solid number. ultimately this depends on the disruptions and whether Nintendo or Sony can capitalize on certain segmentations of unsourced markets. for all Tablets are worth, this market has seen a dramatic collapse.
@Captain_Gonru the reason for a March window is pretty obvious, E3 TGS and so on, Nintendo wants a "steady flow" of games coming not a mini draught. and so far we know nothing of the autumnal(for me its Spring n.n) seasons slots only that October is empty, and Color Splash was met with anger. so... Nintendo will need to tell us what the wii U has left ultimately.
whether there was a reason to delay NX will ultimately be decided when we finally see it.
@DoctorWily conservative as those estimates are, the wii U would've sold more if there was NO mention of the NX in 2015, but as we found out, youtubers wanted NX NOW not later....
whereas PSNEO cant be seen in that light, but then again look at Microsoft.
still, wii U wonderful system, did so many things wrong and didn't get the attention of the wii crowd leaving Nintendo fans to pick up the slack, some people outright didn't pick it up until the console got enough games they wanted, kinda like the PS vita.
@LordGeovanni what the heck are you talking about? I download bought games, I haven't given up ownership...
@Utena-mobile this is why I prefer EB games better than Game stop, they clearly have zero clue what they are doing.
@HSuzumiyaVI
If you do we unload a game through the a hops, you are only purchasing the ability to play the game. You are not buying a copy of the game. At any moment in tendo for a third party, if it is a third party game, could require a download patch that could disable your access. Nintendo also has the authority and ability to forcibly delete your game off of your system.
If you check the fine print of the eshop, you do not have an actual game. That is what I was referring to. If you buy a physical game, you will always have it as well as always be able to play it using a physical system. Even multiple years down the road.
Also, are you aware that EB Games IS Gamestop? They completely bought them several years ago.
@LordGeovanni yes I am aware, they do better than your gamestop in Australia.
@Captain_Gonru well, ready to re-evaluate your points after Breath of the wild?
@Captain_Gonru heres the real reason Zelda Botw was slated for NX, performance issues, much like the last guardian and Horizon. this game pushed the poor Wii U above that of flashy Bayonetta and Xenoblade so expect the same treatment with patches.
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