GameStop sees signs of biggest holiday in years

Tony Bartel, president of GameStop Corporation, speaks at the Reuters Consumer and Retail Summit in New York June 27, 2011.

NEW YORK (Reuters) - GameStop Corp (GME.N) expects this holiday season to be its best in years, as orders grow at a record pace for blockbuster titles such as Activision Blizzard's (ATVI.O) "Call of Duty: Modern Warfare 3."

Packaged goods sales -- GameStop's core business -- in the $65 billion video game industry have slipped in recent years, but this holiday will see growth from last year, GameStop President Tony Bartel told the Reuters Consumer and Retail Summit.

Gamers are reserving Activision Blizzard's first-person shooter game in record numbers, a strong signal for holiday sales, Bartel said. Other hot titles include Electronic Arts Inc's ERTS.O "Battlefield 3" and Ubisoft Entertainment's (UBIP.PA) "Assassin's Creed Revelations," he added.

"The slate for Q4 is arguably the strongest Q4 slate we've seen in many years," Bartel said, adding that customers are already pre-ordering titles in droves.

"Presales for 'Call of Duty: Modern Warfare 3' are accelerating faster than any title we've ever seen in our history, so that's a very strong indication of what's going to happen in the fourth quarter."

Bartel reiterated that GameStop's software sales would be flat to slightly up for the full year but declined to reveal sales targets for the fourth quarter.

GameStop's, the world's largest video game retailer, is struggling to sustain growth in the face of competition from Internet distributors, free online games and even traditional big-box retailers such as Wal-Mart (WMT.N).

Even with a rebound in consumer spending on video games this holiday, Bartel acknowledged having to make long-term changes to his company's business model.

GameStop bought two digital distribution companies this year and is experimenting with selling used tablets in its stores.

BRAINSTORMING

Earlier this year, GameStop began selling used Apple Inc (AAPL.O) iPads in some of its U.S.-based stores where customers can trade in old games or consoles for new and used tablets.

"We are testing the trade of tablets in our stores, and we are selling tablets in our stores," Bartel said.

GameStop's also sells gaming hardware, including home consoles and accessories.

The company hopes that Nintendo's upcoming device, the Wii U, will drive business and even prompt competitors Sony Corp (6758.T) and Microsoft (MSFT.O) to come out with new devices, Bartel said.

While the release of Nintendo's (7974.OS) new Wii U console is still more than a year away, customers will shell out money for the regular Wii, especially after Nintendo slashed its price tag to $150 in May.

"That new price point was a very good move and ... there will be demand for it," Bartel said.

Despite the growing popularity of mobile-oriented games such as "Angry Birds," the executive remained confident the video games industry will remain supreme -- for now.

Games on tablets are free or much cheaper than on consoles, but Bartel said their prices will begin to rise as more sophisticated gamers demand higher-quality games on mobile devices.

Bartel said there is demand on games on tablets to be played in immersive 30-minute blocks, as opposed to the bite-sized five-minute blocks popular today with users.

Yet prices still will not rival those of consoles.

"I don't think you're going to get to the $60 dollar price point on tablet games. I think we have to work to getting to the $10 price point," Bartel said.

GameStop Shares closed 1.26 percent lower at $25.79 on the New York Stock Exchange on Monday.

(Editing by Steve Orlofsky)