Profile: GameStop Corp. (GME)

GameStop Corp. (GameStop) is a retailer of video game products and personal computer (PC) entertainment software. The Company sells new and used video game hardware, video game software and accessories, as well as PC entertainment software, and related accessories and other merchandise. As of January 31, 2009, the Company operated 6,207 stores in the United States, Australia, Canada and Europe, primarily under the names GameStop and EB Games. GameStop also operates the electronic commerce Website www.gamestop.com and publish Game Informer, a multi-platform video game magazine in the United States based on circulation, with approximately 3.5 million subscribers. During the fiscal year ended January 31, 2009, GameStop operated its business in four segments: United States, Canada, Australia and Europe. On April 5, 2008, GameStop acquired Free Record Shop Norway AS. In July 2008, the Company purchased certain assets and Website operations from The Gamesman Limited, a video game and entertainment software retailer, including eight stores in New Zealand. On November 17, 2008, GameStop France SAS, a wholly owned subsidiary of the Company, acquired SFMI Micromania SAS.

Of the Company’s 6,207 stores, 4,331 stores are included in the United States segment and 325, 350 and 1,201 stores are included in the Canadian, Australian and European segments, respectively. Each of the segments consists primarily of retail operations, with all stores engaged in the sale of new and used video game systems, software and accessories, which GameStop refers to as video game products, and PC entertainment software and related accessories. United States segment includes retail operations in the 50 states, the District of Columbia, Guam and Puerto Rico, the electronic commerce Websites www.gamestop.com and www.ebgames.com, and Game Informer magazine. Canada segment includes retail operations in stores throughout Canada and segment results for Australia include retail operations in Australia and New Zealand. The Europe segment includes retail operations in 13 European countries.

The Company’s United States segment is supported by distribution centers in Texas and Kentucky, and further supported through the use of third-party distribution centers for new release titles. GameStop distributes merchandise to its Canadian segment from a distribution center in Ontario. The Company has a distribution center near Brisbane, Australia, which supports its Australian operations and a small distribution facility in New Zealand, which supports the stores in New Zealand. European segment operations are supported by six regionally located distribution centers. GameStop’s international segments purchase products from vendors, including Sony Corporation and Electronic Arts. Products from certain other vendors, such as Microsoft and Nintendo are obtained either directly from the manufacturer or publisher, or through distributors depending upon the particular market in which it operates.

The Company’s product offerings consist of new and used video game products, PC entertainment software, and related products, such as trading cards and strategy guides. Its in-store inventory consists of a constantly changing selection of over 4,500 stock keeping units (SKUs). It has buying groups in the United States, Canada, Australia and Europe that negotiate terms, discounts and cooperative advertising allowances for the stores in their respective geographic areas. GameStop uses customer requests and feedback, advance orders, industry magazines and product reviews to determine, which new releases are expected to be hits. Advance orders are tracked at individual stores to distribute titles and capture demand.

The Company offers video game platforms of all manufacturers, including the Sony PlayStation 2 and 3 and PSP, Microsoft Xbox 360, the Nintendo Wii and DS. It also offers extended service agreements on video game hardware and software. GameStop carries over 1,000 SKUs of new video game software across a variety of genres, including sports, action, strategy, adventure/role playing and simulation. The Company purchases PC entertainment software from over 45 publishers, including Electronic Arts, Microsoft and Vivendi Universal. It offers PC entertainment software across a variety of genres, including sports, action, strategy, adventure/role playing and simulation. Its video game accessories consist primarily of controllers, memory cards and other add-ons. It also carries strategy guides, magazines and trading cards. The Company carries over 300 SKUs of accessories and other products.

The Company publishes Game Informer, a monthly video game magazine featuring reviews of new title releases, tips and secrets about existing games and news regarding developments in the electronic game industry. The magazine is sold through subscription and through displays in its stores in the United States, Canada and Ireland. Game Informer revenues are also generated through the sale of advertising space. In addition, the Company offers the GameStop loyalty card as a bonus with each paid subscription, providing its subscribers with a discount on selected merchandise.

GameStop operates an electronic commerce Website at www.gamestop.com that allows its customers to buy video game products and other merchandise online. The site also offers customers information and content about available games, release dates for upcoming games, and access to store information, such as location and product availability.

The Company competes with Wal-Mart Stores, Inc., Target Corporation, Best Buy Co., Inc., Movie Gallery, Inc., Blockbuster, Inc., Game Group plc, Media Markt, Future Shop, K-Mart, Target and JB HiFi stores.