GameStop Jumps on Optimism for PlayStation 4 Game Resales
The shares advanced 7.8 percent to $37.72 at the close in New York for the largest jump since March 2009, making GameStop the biggest gainer in the Standard & Poor’s 500 Index. The Grapevine, Texas-based retailer has added 50 percent this year, while the S&P has advanced 14 percent.
GameStop shares have fluctuated this year on speculation about potential restrictions on used-game sales in the new generation of consoles. Sony’s announcement yesterday, following Microsoft Corp.’s decision last week to allow resales of used games on the coming Xbox One, means “status quo,” according to Peter Moore, chief operating officer of publisher Electronic Arts Inc. (EA)
“A lot of people thought Microsoft or Sony would put up a wall,” Moore said in an interview with Bloomberg Television. “That’s not the case.”
Sony said yesterday the PS4 won’t put any limits on consumers’ ability to freely share and resell used games.
Microsoft, which yesterday announced the Xbox One will debut in November for $499, said last week that it will let game publishers decide whether to allow resales of titles for the console to selected retailers. Games can be given to friends only once, and shared with restrictions.
GameStop helps to spur new-game sales because customers trade in older titles to purchase newer ones, Julian Raines, the company’s chief executive officer, said today in a separate interview with Bloomberg Television. He said GameStop will be the “dominant” retailer for Xbox One in all of the markets where it has stores.
“We’ll see a rising tide as people spend more time in all forms of gaming,” Raines said.
GameStop has reported lower or unchanged revenue in the last six quarters as a consumer switch to mobile devices has hurt sales of traditional video games. Pre-owned games, which GameStop customers trade in for new versions, were 31 percent of first-quarter revenue, while new ones represented more than 37 percent.
Sony’s new PlayStation is the company’s first new console in 7 years and will cost $399, or 20 percent less than the Xbox One.
Nintendo Co. (7974)’s Wii U player, introduced last November and priced at about $300, has sold below company expectations. The company today announced new titles coming this year and next, including some of its biggest franchises: “Super Mario,” “Donkey Kong,” “Zelda” and “Super Smash Bros.”
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