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Report: Digital Strategy To Grow GameStop To $1.5B In Revenues By 2014

Report: Digital Strategy To Grow GameStop To $1.5B In Revenues By 2014

July 15, 2011 | By Mike Rose

A new investor-focused report predicts that retailer GameStop's new digital strategy will lead the company to grow to $1.5 billion in annual sales volume by 2014.

In a report from Baird Equity Research, analyst Colin Sebastian said that GameStop executives had noted the expected growth of the company in the next three years, from $500 million in sales projected for 2011.

Gamestop is also quoted as saying it expects to take "a meaningful share from market leader Steam" as a result of the recent integration of the Impulse digital distribution service, which it acquired earlier this year from Stardock.

As of now, the majority of digital content sold by GameStop is DLC, and the report noted that 50 percent of GameStop consumers indicated they would not have bought this content without the in-store marketing.

The report also appeared to confirm that EA's upcoming Battlefield 3 will not be available to download through Steam, as widely rumored.

"The upcoming EA title Battlefield 3 will be sold as a download through GameStop, but not through Steam," said the report. "Given Steam's dominance -- and insistence on users downloading a Steam client application -- publishers are likely to be receptive to a competitive alternative."

On the subject of next generation hardware, the report says GameStop does not believe Microsoft or Sony will release new consoles until 2014, although it noted that a successful launch of the Wii U could force the company's to rethink their strategies.

Gamestop posted an $80.4 million profit for the first quarter of the 2011 fiscal year, including a significant 53 percent rise in profits for digital game sales.

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