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If you enjoy reading this site, you might also want to check out these Think Services sites:
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 Finger Gaming (news, reviews, and analysis on iPhone and iPod Touch games.)
 GamerBytes (for the latest console digital download news.)
 Worlds In Motion (discussing the business of online worlds.)
 Game Set Watch (the Group's alt.game weblog.) |
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GameStop: Wii, PS3 Software Attach Rate Still Behind Xbox 360
by Brandon Boyer
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January 24, 2008
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As part of a wide-ranging meeting with GameStop's management, Janco Partners' Mike Hickey discussed why the Wii and PS3's 5-game-per-console attach rates are still behind the Xbox 360's 8.8, suggesting that Guitar Hero and a theorized Rock Band release for the Wii will increase high-margin sales for the retailer.
Hickey made the comments following a meeting with GameStop management, who he said, echoing Lazard's Colin Sebastian's earlier comments, "appear confident they can continue growth in a moderately difficult economic environment, similar to how they performed post 09/11/01, which was a period of economic and social unrest at about the same point in the console cycle."
Hickey goes on to note, though, that GameStop continues to expect that the Wii's attach rate will stay at its current levels, behind Xbox 360, and at the same level with the PS3 during 2007 -- which Hickey maintains is likely because of the amount of consumers purchasing the latter console specifically for its Blu-ray video capacity.
Despite that, though, GameStop says that the aforementioned music-based games, with higher retail prices by way of their hardware peripherals, "should provide large gross dollar contributions," and says Hickey, roughly 20 precent profit margins, "consistent with premium new game sales."
"Importantly," Hickey continues, "management believes they’re gaining market share with Nintendo products," and "consumer demand for the Wii console continues to surpass management expectations and is currently tracking PS2’s growth from the prior cycle."
"If Wii console sales continue to track PS2 sales from the prior cycle," he concludes, "Wii sales could total over 8 million in [2008] versus +6 million in [2007]," should supply increase, as well as third party software content.
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