GameStop Says 2.3 Million Waiting for New Game Consoles
GameStop Corp. (GME), the largest specialty retailer of video games, said its initial allocation of PlayStation 4 consoles sold out and that 2.3 million customers are waiting for new players from Sony Corp. (6758) and Microsoft Corp. (MSFT)
Initial sales of the player exceeded its predecessor, the PlayStation 3, by more than 80 percent in the first few days, executives of the Grapevine, Texas-based chain said today on a conference call with analysts. They also anticipate a large waiting list for Microsoft Corp.’s Xbox One, suggesting a prolonged industry sales slump is ending.
“We still have over 2.3 million customers on the First to Know List, which indicates continued demand for months to come,” GameStop President Tony Bartel said on the call.
Sony said on Nov. 17 it sold more than 1 million PlayStation 4 consoles in the U.S. and Canada within 24 hours of the $399 machine going on sale. The figure included some of the 1 million units Tokyo-based Sony presold on a global basis, said Dan Race, a PlayStation spokesman.
Microsoft’s $499 Xbox One goes on sale tomorrow in 13 countries and also is expected to be in high demand after a seven-year drought on new home consoles from the two companies. Nintendo Co. (7974)’s Wii U is entering its second year of sales.
GameStop fell 6.9 percent to $48.80 at the close in New York, the biggest decline since May. The company forecast fourth-quarter profit of $1.97 to $2.14 a share, less than the $2.16 average of 20 analysts’ estimates compiled by Bloomberg.
The retailer, which accounts for more than half of Sony and Microsoft’s video-game software sales, will benefit from the console transition based on its ability to lure gamers who trade in older titles and hardware for discounts on new gear, said Colin Sebastian, an analyst at Robert W. Baird & Co. in San Francisco. He recommends buying the stock.
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