Another indication that people are still spending money in this recession, but just in other ways is the recent quarterly financial information from GameStop Corp. The company’s net income rose 22% amid strong sales in the company’s fiscal fourth quarter, especially for used videogames, and the retailer projected strong earnings for the current quarter.
Revenue rose 22% to $3.49 billion, as sales at stores open at least a year increased 9.6%. New-game software sales increased 23%, while used-game sales jumped 31%. This growth in game sales is despite a slowdown in game console sales. So, what’s happening?
People are making adjustments in how they spend their money and putting a premium on their cost per entertainment hour. For a video game, the cost per hour can be just pennies an hour and parents as well as teens see great value here. A big plus for GameStop is that when you are tired of the game, you can go back in and trade it for a different game. While GameStop will not give you all that much for your used game, they will give you something and as a result, it drives a lot of perceived value.
A suggestion for GameStop would be how to monetize the traffic and purchases in their store even further. While you can’t go back into old games and create new contextual marketing messages, I am sure that there are a bunch of non-competitive companies out there that would like to slap a sticker on the game case or include a coupon in the bag. As tough times continue, you will see more and more of this type of marketing.
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