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GameStop: Wii Shortages To Continue, Price Drops Expected For PS3, 360
by Brandon Boyer
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March 18, 2008
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Following the release of its latest financial results, GameStop executives have said they expect Wii shortages to continue for at least the next 6 months, and that $50 price drops have been modeled for both Xbox 360 and PS3.
Asked in its investor call if the company was seeing an end to the post-holiday shortages that affected the Xbox 360, DS, and Wii in January, company COO Dan DeMatteo said that specifically with the Wii, the company anticipated that the console's supply "won't meet demand for the next 2 quarters," at least.
The Xbox 360 and DS, he said were both seeing increased allocations, but the company was still anticipating shortages with the PSP. The company was "not seeing any problems with PS3," though, said DeMatteo, and GameStop expects "good stock when GTA IV launches."
Asked if the company was assuming any hardware price drops for the year, CFO David Carlson said the company had "assumed a couple," including a $30 price cut for the PS2. Carlson added that the company is making the assumption that both the Xbox 360 and PS3 will have a $50 price cut some time in the year, but stressed that it had no direct knowledge. No Wii or PSP price cuts have been assumed in the company's financial models.
Elsewhere in the call, in light of increased talk of economic downturns in the media, DeMatteo said GameStop "can't find evidence of the economy affecting our business," likening the situation to that after September 11th, where stores saw sales growth "as consumers travel less and stay at home more."
Finally, CEO Dick Fontaine, when asked if the company was feeling any pressure from digital downloads, said that the story was a future oriented one, and not something the company was overly concerned with.
"Small files, small purchases, micropurchases," said Fontaine, were the mass-market extent of the current model. "We look at that as additive to the experience," he added, "and in no way threatening to us."
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