Lazard Capital Markets analyst Colin Sebastian sees GameStop making over $200 million in sales this year specifically in the digital market. Revenues will result from increased sales from Xbox Live Arcade, PSN and Wii Point cards, downloadable content and the Kongregate service that GameStop recently acquired.
Sebastian sees this as the beginning of a trend that will result in more significant sales from digital revenues. “Digital revenue streams [are] on the cusp of contribution,” for the company, says Sebastian. GameStop will benefit by embracing in-store merchandising, trade-in credits and the loyalty program.
Sales aimed at digital content on the consoles might be one part of the equation, but Sebastian points out that non-console platforms will also receive major focus from GameStop. Mobile platforms will see a significant backing from GameStop, as the company will “aggregate content across a broad variety of connected devices.” GameStop recently released a mobile game to the App Store, Buck and the Coin of Destiny, starring the bunny mascot.
All in all, GameStop is predicting a favorable forecast for the holiday season, despite concerns from recent NPD study. GameStop cited “pleasing” sales on the Move and says that Kinect will be in “strong demand” according to pre-orders.
The new PowerUp system that recently replaced the Edge Card at the forefront of GameStop’s loyalty program seems to be doing well, says Sebastian. PowerUp has been a “surprisingly successful pilot.” The loyalty program offers two options, with over 60% of signups opting for the $14.99 paid program that offers extra bonuses and trade-in credits.
