GameStop details the positive impact of Switch, is the retailer’s “most successful Nintendo launch ever”
Posted on August 26, 2017 by Brian(@NE_Brian) in News, Switch
GameStop reported its second quarter financial results this week. Among what the retailer highlighted, Switch sales have been very strong. Switch drove sales in Q2, and GameStope is now the leading retailer in terms of the system’s market share.
During its financial conference call, GameStop CEO Paul Raines and CFO Robert Lloyd went in-depth on just how much of a positive factor Nintendo’s console has been. In fact, Raines even highlighted the fact that Switch is the company’s “most successful Nintendo launch ever.” Demand has continued to be strong, which is expected to continue leading up through the holidays.
Here’s what Raines shared about Switch, as transcribed by Seeking Alpha:
The second quarter played out along the lines we had expected achieving our targets. On the physical gaming front, the Switch has been a massive success, leading to our hardware growth of 14.8% for the quarter.
Tony and Rob will give you details, but it has been our most successful Nintendo launch ever. Attach rates have been consistently high and are at over five to one since launch and we expect healthy allocations in the back half of the year.
Our Game Trust division published Has-Been Heroes for the Switch and has also been very successful. Overall, during the quarter, we grew our software market share by 30 basis points.
The Switch launch is one of the keys we have been watching all year to gauge the consumer’s appetite for gaming. Based on the results so far, the consumer’s appetite for gaming is healthy and we believe that all consoles have opportunities for growth.
Lloyd also contributed the following regarding Switch:
In the U.S. GameStop branded stores, market-leading Switch sales fueled our hardware growth. While we had the largest Switch market share of any retailer, we were again allocated below our normal market share, resulting in lower hardware market share for the quarter.
We continue to see strong demand for the Switch and sell out our inventory in a matter of days of it being available in our stores and our websites. We believe that this will continue through the holiday.
We continue to drive strong software and accessory attached to Switch units, attach units twice the rate of our competition. This means that we are far more profitable on the units that we are allocated. We are selling Switches in our stores and in both GameStop.com and ThinkGeek.com, where we are offering unique Collectible bundles.
We grew software share during the second quarter as we capitalized on key title launches and drove attach to the Switch. We are excited about the title slate ahead of us and believe that we will see software growth in the back half of the year.
Our pre-owned sales lagged software sales by four points due to strong new Switch software sales. To put the impact of Switch into perspective, our pre-owned growth would have outpaced new software growth by 10 points, if Switch sales were removed from both categories. Our pre-owned inventory is in a very good position as we have 8% more inventory per store than we did a year ago.
Another bright spot was our omnichannel growth which grew 86% during the quarter. While this growth was partially fueled by popular Switch bundles, we were also aided by the addition of buy online, ship to store during the quarter.
