A recent lull in packaged game sales is to be expected for an extended console cycle nearing its end, according to GameStop CEO, Paul Raines.
Mr Raines insists that, while game sales have been weak at retail, the holiday season always sees a spike, and with Wii U, Nintendo's new console, set to launch in late 2012, the forecast is surprisingly promising.
“As we think about the Wii U, we think that’s a very significant player in what could happen at holiday," he said.
The first half of 2012 has been "tough on NPD data", which has "spooked" investors. "But we still have most of the sales year ahead of us and there’s a lot of positive signs," he said, reminding us that only a third of the year's sales period has passed.
The extension of the console cycle hasn't helped, putting "pressure on the top line", as well as on hardware sales. However, Mr Raines sees a common trend. “If you go back and study console cycles, although this is the longest we’ve seen, this is what happens at the end of a console cycle.
“We think this new console cycle that’s emerging with the Wii U and hopefully next year we’ll see more [Microsoft and Sony], is going to be typical of what we’ve seen.”
As one would expect to hear from the CEO of a retailer, Mr Raines doesn't expect the industry to ditch boxed games, seeing as though future hardware will offer “unbelievable new capabilities for rendering, speeds, et cetera, which will require physical games.”
But then there's the threat from the digital landscape.
“The digital console is the fastest part of the digital business for us. So we’re preparing for that through the investments we’ve made in digital spaces."
As a company that relies heavily on the sale of pre-owned software -- the retailer buys used stock from consumers and sells it back at heavily marked-up prices -- Mr Reins is optimistic about the future of that market, as "next consoles will support [used games]".
By Gaetano Prestia