GameStop 2010 Annual Report Breakdown

Just out of curiosity, I went through Gamestops 2010 Annual Report and picked out some interesting numbers to share. This prolly means little to nothing to anyone, but just for kicks, here's some stuff I found interesting. I'm not super for or against the company, and I'm going to try to be as bias free as possible. If I have something snarky to add, I'll try to remember to italicize it. Onward and forward.

Fiscal Year Ending January 29, 2011

This means that these numbers represent 1/292010~1/29/2011 unless explicitly stated otherwise. As with almost all large corp financial statements, they also list previous year numbers to compare against so I may throw some of those out there too just for fun.

Some PR

Gamestop is now two years running in Newsweek's "Greenest Big Companies in America" list. Having recycled over 6.8 million pounds of electronic and cardboard waste and repairing more than 20 million games and one million systems. They also have since 2007 donated more than one million dollars to the Make-A-Wish foundation providing more than 850 shopping spree wishes come true.

Can't go wrong with charity, but I have a feeling they prolly got to write off at least a portion of it from their taxes =P

Physical Locations

They currently run 6,670 stores under the names GameStop, EB Games and Micromania broken down as follows.

CountryNumber of Stores
United States4,536
Canada345
Australia405
Europe1,384

US State Breakdown

StateNumber of Stores
Alabama78
Alaska7
Arizona89
Arkansas32
California481
Colorado66
Connecticut61
Delaware18
District of Columbia3
Florida312
Georgia142
Guam3
Hawaii24
Idaho14
Illinois196
Indiana94
Iowa34
Kansas37
Kentucky70
Louisiana74
Maine13
Maryland110
Massachusetts105
Michigan125
Minnesota58
Mississippi44
Missouri73
Montana9
Nebraska21
Nevada43
New Hampshire27
New Jersey163
New Mexico27
New York260
North Carolina143
North Dakota7
Ohio194
Oklahoma49
Oregon36
Pennsylvania216
Puerto Rico45
Rhode Island15
South Carolina75
South Dakota5
Tennessee96
Texas381
Utah27
Vermont5
Virginia151
Washington82
West Virginia31
Wisconsin58
Wyoming7

(Goddamn Puerto Rico, Guam, and District of Columbia threw my table row count off! How many of you went straight to your state to check how many were there? 481 in Cali =O)

In addition to these stores, they have a 362,000 sqft distribution center and 518,000 sqft corporate office in Texas and a 260,000 sqft distribution center in Kentucky.

EDIT: As graciously pointed out by Jimbo, my math was severely wrong here. Made the mistake of just dividing the square footage by the number of feet in a mile instead of by the number of square feet in a square mile -_-;; Sorry folks. While 9,338,000 sqft of gamestop isn't anything to shake a stick at, turns out it's only around 0.34 square miles =P Thanks Jimbo for pointing it out. I feel so ashamed.

The average square footage of a store is approximately 1,400 square feet. . . That's 9,338,000 square feet of gamestops or 1,768 sq miles -_-;; To put that into some kind of perspective, Los Angeles is 502 square miles and all of Elder Scrolls Oblivion is a measly 16 square miles. They actually take up more space than is available in all of the state of Rhode Island which is 1,545 square miles. Anyway.

It's also mentioned that they opened 359 new stores while closing 139 during this fiscal year.

Staff

On average, each store employs one manager, one assistant manager and between two and ten sales associates.

"To encourage them to sell the full range of our products and to maximize our profitability, we provide our employees with targeted incentive programs to drive overall sales and sales of higher margin products. In certain locations, we also provide certain employees with the opportunity to take home and try new video games, which enables them to better discuss those games with our customers. In addition, employees are casually dressed to encourage customer access and increase the "gameoriented" focus of the stores."

This spawned all manner of internet rage, and justifiably so. These games should not be sold as new =\.

Employee 17,000 full-time salaried and hourly employees and between 31,000 and 51,000 part-time employees worldwide. Specifically states that the U.S. employees are not represented by any sort of labor union.

Merch

In-Store inventory generally consists of a constantly changing selection of over 4,500 SKUs of which generally over 1,000 are new video game software.

Carry a used game selection of approximately 3,000 SKUs with an average price of $16 compared to an average price of $42 for new video game titles.

over 300 SKUs are accessories and other products which have higher margins than new video games.

They purchase from approximately 75 manufacturers and publishers. The top ten of which account for 82% of their new product purchases. The individual vendor accounts that exceed 10% of their annual purchasing are listed as follows.

VendorPercentage of 2010 purchases
Microsoft18%
Nintendo16%
Sony16%
Activision12%
Electronic Arts10%

A little surprising that Microsoft is up top. I'm guessing it's because of their hardware more than anything else. That's my guess, not in the statement -_-;; Also, I wonder what these number were back in Nintendo's heyday of Wii and DS domination. Too lazy to check right now.

EDIT. nvm, curiosity got the better of me. I don't know if 2008 was Nintendo's best year, but in that year, they accounted for a full on 25% Compared to Microsoft and Sony at 13% and EA at 11%. Activision this year didn't crack 10%.

GAME INFORMER

Fifth largest consumer publication in the U.S. with 5.7 million paid subscriptions.

Total Sales

39% of sales and 57% of operating earnings were generated during the fourth quarter. (This must be the numbers publishers look at when they decide that they all want to release their games during this time period -_-;;)

Following numbers is in millions of dollars.

$9,473.7 Sales

$6,936.1 Cost of Sales

$2,537.6 Gross Profit.

(So like, say I buy a game for $20 from EA, and sell it for $30. Sales would be $30, cost of sales would be $20 and Gross profit would be $10)

$408 Consolidated net income. (Income after taking out all expenses such as income taxes, wages, salaries, rent, depreciation, etc. By the way, they paid $214.6 million in income taxes in 2010 =P)

So, in the end, only 4.3% of their sales trickled down into net income attributable to GameStop. Seems small but that's still $408,000,000. Not bad. Now lets get down to some nitty gritty sales.

Games Sales

Like before, these numbers are in millions of dollars

Type of Sales$ AmountPercentage of total Sales
New Video Game Hardware$1,720.018.1%
New Video Game Software$3,968.741.9%
Used Video Game Products$2,469.826.1%
Other$1,315.213.9%

Now looking at this, it seems like they make a killing selling new games. . . but wait till you see their Gross Profit for these same categories.

Type of SalesGross ProfitGross Profit Percent
New Video Game Hardware$124.97.3%
New Video Game Software$ 819.620.7%
Used Video Game Products$1,140.546.2%
Other$452.634.4%

There it is. I think these are the numbers that really matter. Gross profit if you recall, is the amount of profit they make on the sale. The amount left over for them to keep after they take out the cost of the goods sold (the price they paid the vendor which in the case of new items, are companies and in the case of used video games are us.)

Because everyone loves pie graphs. Even shitty Excel ones -_-;;

While Used Video Game Products only accounted for 26.1% in total sales, they were responsible for 46.2% of GameStop's Gross Profit for the year. It's also prolly interesting to take note how utterly abysmal the profit margin for hardware is (7.3%). I'm in wholesale for a living, and generally you give retailers a profit margin of 20% to keep them interested in actually carrying and selling your product (which is where the New Video Game Sales are). Anything less, and it's a real hard sell. Unless of course you're Microsoft, Nintendo or Sony and you're selling to a chain that specializes in game sales. It'd be sort of ridiculous to run a game shop that doesn't carry the hardware itself. Also, This is all new hardware. I'm sure the profit margin is higher for accessories, and lower for consoles in most cases. That last bit is an assumption on my part.

Other Numbers

Gamestop spent an awesome 83.7 millions dollars in advertising. That's up 26 mill from the previous year's $57.7 mil.

They reported $69.5 million in inventory shrinkage in 2010. Up from $66.5 million in 2009. What's shrinkage? Missing inventory. . . you know. Stolen goods -_-;;

They put down their GoodWill amount to be $1,996.3 million in 2010. That is, the amount that they feel GameStop's name is worth. The brand value that the company is worth over its assets. Haha. Sorry. Haha.

Financial Mumbo Jumbo

They have never declared or paid any dividends on its common stocks.

Their Common Stock high for all of 2009 was $32.82 compared to $25.75 in 2010. The lows were $19.42 in 2009 and $17.12 in 2010.

In Closing

I'm damn sleepy and it's 2:30 AM =_=;; There's a bunch more stuff that breaks down the numbers into specific countries and a whole lot of predictions, corporate strategies, what they expect will happen, blah blah blah. I think I've covered the real interesting stuff and if you're curious about the rest, all of this is publicly available on their website. As is the Financial statements of any publicly traded company you're interested in. If this sort of thing is of enough interest to enough people, maybe I'll do a few more for other companies I'm interested in such as Nintendo, Sony, EA, Activision, etc. Hope at least some of this was of use to some of you =)

17 Comments
17 Comments
Edited by Fobwashed

Just out of curiosity, I went through Gamestops 2010 Annual Report and picked out some interesting numbers to share. This prolly means little to nothing to anyone, but just for kicks, here's some stuff I found interesting. I'm not super for or against the company, and I'm going to try to be as bias free as possible. If I have something snarky to add, I'll try to remember to italicize it. Onward and forward.

Fiscal Year Ending January 29, 2011

This means that these numbers represent 1/292010~1/29/2011 unless explicitly stated otherwise. As with almost all large corp financial statements, they also list previous year numbers to compare against so I may throw some of those out there too just for fun.

Some PR

Gamestop is now two years running in Newsweek's "Greenest Big Companies in America" list. Having recycled over 6.8 million pounds of electronic and cardboard waste and repairing more than 20 million games and one million systems. They also have since 2007 donated more than one million dollars to the Make-A-Wish foundation providing more than 850 shopping spree wishes come true.

Can't go wrong with charity, but I have a feeling they prolly got to write off at least a portion of it from their taxes =P

Physical Locations

They currently run 6,670 stores under the names GameStop, EB Games and Micromania broken down as follows.

CountryNumber of Stores
United States4,536
Canada345
Australia405
Europe1,384

US State Breakdown

StateNumber of Stores
Alabama78
Alaska7
Arizona89
Arkansas32
California481
Colorado66
Connecticut61
Delaware18
District of Columbia3
Florida312
Georgia142
Guam3
Hawaii24
Idaho14
Illinois196
Indiana94
Iowa34
Kansas37
Kentucky70
Louisiana74
Maine13
Maryland110
Massachusetts105
Michigan125
Minnesota58
Mississippi44
Missouri73
Montana9
Nebraska21
Nevada43
New Hampshire27
New Jersey163
New Mexico27
New York260
North Carolina143
North Dakota7
Ohio194
Oklahoma49
Oregon36
Pennsylvania216
Puerto Rico45
Rhode Island15
South Carolina75
South Dakota5
Tennessee96
Texas381
Utah27
Vermont5
Virginia151
Washington82
West Virginia31
Wisconsin58
Wyoming7

(Goddamn Puerto Rico, Guam, and District of Columbia threw my table row count off! How many of you went straight to your state to check how many were there? 481 in Cali =O)

In addition to these stores, they have a 362,000 sqft distribution center and 518,000 sqft corporate office in Texas and a 260,000 sqft distribution center in Kentucky.

EDIT: As graciously pointed out by Jimbo, my math was severely wrong here. Made the mistake of just dividing the square footage by the number of feet in a mile instead of by the number of square feet in a square mile -_-;; Sorry folks. While 9,338,000 sqft of gamestop isn't anything to shake a stick at, turns out it's only around 0.34 square miles =P Thanks Jimbo for pointing it out. I feel so ashamed.

The average square footage of a store is approximately 1,400 square feet. . . That's 9,338,000 square feet of gamestops or 1,768 sq miles -_-;; To put that into some kind of perspective, Los Angeles is 502 square miles and all of Elder Scrolls Oblivion is a measly 16 square miles. They actually take up more space than is available in all of the state of Rhode Island which is 1,545 square miles. Anyway.

It's also mentioned that they opened 359 new stores while closing 139 during this fiscal year.

Staff

On average, each store employs one manager, one assistant manager and between two and ten sales associates.

"To encourage them to sell the full range of our products and to maximize our profitability, we provide our employees with targeted incentive programs to drive overall sales and sales of higher margin products. In certain locations, we also provide certain employees with the opportunity to take home and try new video games, which enables them to better discuss those games with our customers. In addition, employees are casually dressed to encourage customer access and increase the "gameoriented" focus of the stores."

This spawned all manner of internet rage, and justifiably so. These games should not be sold as new =\.

Employee 17,000 full-time salaried and hourly employees and between 31,000 and 51,000 part-time employees worldwide. Specifically states that the U.S. employees are not represented by any sort of labor union.

Merch

In-Store inventory generally consists of a constantly changing selection of over 4,500 SKUs of which generally over 1,000 are new video game software.

Carry a used game selection of approximately 3,000 SKUs with an average price of $16 compared to an average price of $42 for new video game titles.

over 300 SKUs are accessories and other products which have higher margins than new video games.

They purchase from approximately 75 manufacturers and publishers. The top ten of which account for 82% of their new product purchases. The individual vendor accounts that exceed 10% of their annual purchasing are listed as follows.

VendorPercentage of 2010 purchases
Microsoft18%
Nintendo16%
Sony16%
Activision12%
Electronic Arts10%

A little surprising that Microsoft is up top. I'm guessing it's because of their hardware more than anything else. That's my guess, not in the statement -_-;; Also, I wonder what these number were back in Nintendo's heyday of Wii and DS domination. Too lazy to check right now.

EDIT. nvm, curiosity got the better of me. I don't know if 2008 was Nintendo's best year, but in that year, they accounted for a full on 25% Compared to Microsoft and Sony at 13% and EA at 11%. Activision this year didn't crack 10%.

GAME INFORMER

Fifth largest consumer publication in the U.S. with 5.7 million paid subscriptions.

Total Sales

39% of sales and 57% of operating earnings were generated during the fourth quarter. (This must be the numbers publishers look at when they decide that they all want to release their games during this time period -_-;;)

Following numbers is in millions of dollars.

$9,473.7 Sales

$6,936.1 Cost of Sales

$2,537.6 Gross Profit.

(So like, say I buy a game for $20 from EA, and sell it for $30. Sales would be $30, cost of sales would be $20 and Gross profit would be $10)

$408 Consolidated net income. (Income after taking out all expenses such as income taxes, wages, salaries, rent, depreciation, etc. By the way, they paid $214.6 million in income taxes in 2010 =P)

So, in the end, only 4.3% of their sales trickled down into net income attributable to GameStop. Seems small but that's still $408,000,000. Not bad. Now lets get down to some nitty gritty sales.

Games Sales

Like before, these numbers are in millions of dollars

Type of Sales$ AmountPercentage of total Sales
New Video Game Hardware$1,720.018.1%
New Video Game Software$3,968.741.9%
Used Video Game Products$2,469.826.1%
Other$1,315.213.9%

Now looking at this, it seems like they make a killing selling new games. . . but wait till you see their Gross Profit for these same categories.

Type of SalesGross ProfitGross Profit Percent
New Video Game Hardware$124.97.3%
New Video Game Software$ 819.620.7%
Used Video Game Products$1,140.546.2%
Other$452.634.4%

There it is. I think these are the numbers that really matter. Gross profit if you recall, is the amount of profit they make on the sale. The amount left over for them to keep after they take out the cost of the goods sold (the price they paid the vendor which in the case of new items, are companies and in the case of used video games are us.)

Because everyone loves pie graphs. Even shitty Excel ones -_-;;

While Used Video Game Products only accounted for 26.1% in total sales, they were responsible for 46.2% of GameStop's Gross Profit for the year. It's also prolly interesting to take note how utterly abysmal the profit margin for hardware is (7.3%). I'm in wholesale for a living, and generally you give retailers a profit margin of 20% to keep them interested in actually carrying and selling your product (which is where the New Video Game Sales are). Anything less, and it's a real hard sell. Unless of course you're Microsoft, Nintendo or Sony and you're selling to a chain that specializes in game sales. It'd be sort of ridiculous to run a game shop that doesn't carry the hardware itself. Also, This is all new hardware. I'm sure the profit margin is higher for accessories, and lower for consoles in most cases. That last bit is an assumption on my part.

Other Numbers

Gamestop spent an awesome 83.7 millions dollars in advertising. That's up 26 mill from the previous year's $57.7 mil.

They reported $69.5 million in inventory shrinkage in 2010. Up from $66.5 million in 2009. What's shrinkage? Missing inventory. . . you know. Stolen goods -_-;;

They put down their GoodWill amount to be $1,996.3 million in 2010. That is, the amount that they feel GameStop's name is worth. The brand value that the company is worth over its assets. Haha. Sorry. Haha.

Financial Mumbo Jumbo

They have never declared or paid any dividends on its common stocks.

Their Common Stock high for all of 2009 was $32.82 compared to $25.75 in 2010. The lows were $19.42 in 2009 and $17.12 in 2010.

In Closing

I'm damn sleepy and it's 2:30 AM =_=;; There's a bunch more stuff that breaks down the numbers into specific countries and a whole lot of predictions, corporate strategies, what they expect will happen, blah blah blah. I think I've covered the real interesting stuff and if you're curious about the rest, all of this is publicly available on their website. As is the Financial statements of any publicly traded company you're interested in. If this sort of thing is of enough interest to enough people, maybe I'll do a few more for other companies I'm interested in such as Nintendo, Sony, EA, Activision, etc. Hope at least some of this was of use to some of you =)

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Posted by Swoxx

Good job duder, interesting read

Posted by Fobwashed

@Swoxx: Thanks =) I'm beginning to notice a trend in where the later is is, the more random the things I post.[][

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Posted by AhmadMetallic

kill it all with fire 
 
KILL IT

Posted by Vexxan

Love reading reports like this, great job putting it all together :)

Posted by amir90

Cool stuff.

I like my local gamestop.

haters can hate.

Posted by AlexW00d

This was definitely a great read.

Posted by Twisted_Scot

Pie charts make this post 10 out of 10.

Posted by Enigma777

Guam sounds like the place to live.

Posted by wolf_blitzer85

Holy crap put some more Gamestops in California why don't you. Then again, I guess there's some sense to that.

Anyway thanks for putting together all this info!

Oh yeah and obligatory "Gamestop sucks" and all that business.

Posted by iam3green

interesting stuff right there. i try to understand the best i can with that type of stuff. i would of thought there were more gamestops where i live. does that also count eb games? i know it's part of them.

Posted by Fobwashed

@AhmadMetallic: Fire kills many things. Including Annual Reports.

@AlexW00d: Thanks =)

@Twisted_Scot: Even a shitty pie chart is better than none. If there's a next time, I promise to make it better =P

@wolf_blitzer85: I live in Cali and there are literally 4 that I can think of less than 10 minutes from where I live. that number jumps to around 7 if I increase my drive by 5 min. And you're welcome!

@iam3green: Yes, this includes all their other names which at this point seems to only be EB games and that one that's outside of the US.

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Posted by Taefarinas

Another interesting post by you. Also, pie charts are awesome.

Posted by McShank

my local gamestop laughed at me today when i said i wanted to pre-order Dark souls for ps3... I asked why, they said because its coming out on the 4th and theres not enough time to get more copies.. i told them to that Amazon just got my money and i get it launch day. Also found 2 psp games that had little cards in the back behind the books that let me DL free games for ps3/psp.. mm free yggdra union.

Posted by Twisted_Scot
@Fobwashed: I love Pie charts, they make me hungry.
Posted by Jimbo

@Fobwashed said:

The average square footage of a store is approximately 1,400 square feet. . . That's 9,338,000 square feet of gamestops or 1,768 sq miles -_-;; To put that into some kind of perspective, Los Angeles is 502 square miles and all of Elder Scrolls Oblivion is a measly 16 square miles. They actually take up more space than is available in all of the state of Rhode Island which is 1,545 square miles. Anyway.

That's your maths teacher. I think you just gave him a stroke.

Posted by Fobwashed

@Jimbo: My math teacher quite liked me very much. Though I'm gonna keep this post away from him to keep us on good terms. Thanks for the catch. Editied -_-;;

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