GameStop’s Lucrative Preowned-Game Business Silences Naysayers

Taking in used merchandise for store credit to be exchanged for other pre-owned items or new games has proven to be highly lucrative for GameStop Corp. The company’s gross margin on used games was 47 percent compared with just 10 percent on new hardware the last fiscal year, according to the Wall Street Journal.

GameStop has skeptics questioning the used-game business after the release of Sony’s Playstation 4 and Microsoft’s Xbox One. Investors have sold more than one-third of available shares because they believe they will be able to purchase them at a lower price after the stocks fall. GameStop, however, seems to be in the clear to meet its fairly wide guidance range for the quarter of an increase of one to five percent in same-store sales and earnings per share of between 58 and 64 cents, according to WSJ.

One of GameStop’s biggest challenges comes in the digital form. Game makers are now bypassing brick-and-mortar retailers and angling for a bigger cut through digital downloads. Another challenge the company faces are holiday sales, as some blockbuster releases have been delayed until 2015. If GameStop’s business model has proven anything, it is that its loyalty program helps retain customers. If the company surpasses the holiday season challenges, it will once again prove short sellers wrong.

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Virginia MacKoul

Virginia is a graduate from the University of Florida's College of Design Construction and Planning with a degree in Sustainability and the Built Environment, and a minor in Urban Regional Planning. Virginia joined the Front Street team in 2011, as an intern. Upon graduation, Virginia joined the Front Street team full-time as the Director of Client Services. Ms. MacKoul’s addition furthers Front Street’s continued growth and expansion within Gainesville and other North Central Florida markets. She was promoted to Director of Marketing in 2014 and now manages the firm’s team of interns and oversees all marketing and branding activity. Virginia was born in Boston and moved to Lee County, Florida in 1997. Virginia graduated her high school's International Baccalaureate program and started at the University of Florida with a focus on Architecture. Virginia shares Front Street's passion of giving back to the community and those in need. Virginia's hobbies include photography, cooking, football, movies, music, and spending time with her dog, Brinkley.

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