GameStop's holiday to top 2009 - executive
NEW YORK |
NEW YORK (Reuters) - The video game industry should rebound in the fourth quarter as holiday shoppers hit the stores for some hotly anticipated games, including the next Call of Duty instalment, and a new generation of motion controllers, a top GameStop Corp executive said.
GameStop's Tony Bartel, president of the world's largest stand-alone retailer of video-game software, consoles and accessories, said in a recent interview that the one-two punch of new titles and controllers will likely propel GameStop to a stronger holiday season than in 2009.
"All of our indicators are looking very strong for the holiday and we're very bullish on it," Bartel said.
GameStop had holiday sales of $2.86 billion in 2009, little changed from the year earlier, and the company blamed the results on a weak economy, bad weather and product shortages.
The $60.4 billion global video game industry, which dwarfs Hollywood's annual box office take, continues to slide. In September, software sales dropped 6 percent to $614 to million, while hardware sales tumbled 19 percent to $383 million, according to retail research firm NPD.
Bartel said this year stores are already seeing strong shopper traffic and that holiday sales will get a boost from Activision Blizzard Inc's Call of Duty: Black Ops and Ubisoft Entertainment's Assassin's Creed.
Other big sellers, he said, will be Sony Corp's Move and Microsoft Corp's Kinect, which are accessories that mimic and improve upon motion-sensor functions pioneered by Nintendo's Wii game system.
Sales of Sony's Move, which came out in September, have exceeded Bartel's expectations and the Kinect is shaping up to do even better, he said.
Bartel said GameStop had to turn off its reservation system to keep up with the orders for the Kinect, which arrives in November. He said the company is working with Microsoft daily to figure out supply issues.
GameStop, like many stocks with exposure to the video game industry, could use a strong holiday season. GameStop shares are down 17 percent this year, but have now dropped far enough to present a buying opportunity, said Anthony Chukumba, a BB&T Capital Markets analyst.
"GameStop trades at one of the lowest multiples of any publicly-traded U.S. retailer," Chukumba said, adding that shares are trading seven times forward earnings.
GameStop's Bartel said he expects industry software sales to be flat this year but for GameStop to outpace that by 5 to 10 percent.
Analysts like Sterne Agee's Arvind Bhatia agreed that GameStop could outperform wider games sales because of its brand awareness with consumers, its loyal base of shoppers and its revamped rewards program.
GameStop's biggest challenge this holiday will be keeping up with Wal-Mart, which slashed its video game prices during the last holiday season and hurt GameStop sales, Bhatia said.
GameStop shares were down 1 cent at $18.26 on Tuesday.
(Reporting by Liana B. Baker; Editing by Paul Thomasch, Dave Zimmerman)
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