GameStop 2007 Annual Report Download - page 7

575-600 New Stores. There continues to be innumerable
markets worldwide still not fully served by a GameStop
store; therefore we intend to open between 575 and 600
stores in 2008 with almost half of this total coming from
our international operations.
While there are many reasons for believing that we have huge
growth potential outside the U.S., two stand out: First, our
unique business model is valued regardless of country or
culture. Customers the world over appreciate a better deal.
Secondly, the console installed base is growing everywhere
we do business.
An Increased Emphasis on Value. The benefi ts to the
GameStop customer of being able to trade used product for
new essentially creates a currency that makes new games
a great buy. There is no question that our value proposition
will play particularly well in a cautious economy.
Hardware Price Reductions. We are looking for selected
price reductions on video game systems throughout the
year which will draw even more players to gaming and
increase the important installed base of users.
An Expanding Refurbishment Center. Last year GameStop
refurbished over 10 million software units and 1 million pieces
of hardware. Product that was scratched, marred and in many
cases unplayable, was repaired and put back in circulation.
In 2008 we will ramp up our worldwide refurbishment
campaigns adding even more value to our offerings.
Improved Operations. In 2008, we will make signifi cant
capital investments in remodeling many of our older stores.
We are upgrading our point of sale systems, and will be
more frequently updating our store presentation to remain
consistent with emerging categories, platforms, and titles.
A Stronger Brand. GameStop has grown so fast that “what
we are” may not have caught up with “where we are.” In
truth, we have never really spent much time formally building
our brand. In 2008, we will be much more aggressive
communicating, “GameStop: Power To The Players” to a
rapidly growing and more diverse group of customers.
THE VIDEO GAME TRANSFORMATION
In 2007, the business reached a transformative stage
that has, and will continue to transcend traditional
forecasting. Our plans are driven by a belief that the video
game business has broken through to a status beyond
“the core” and is attracting a broader demographic than
ever before. It is an entertainment category with multiple
platforms, a growing range of titles and innumerable add-
ons that favor the knowledge of the ‘mass specialist.’ It
is a worldwide growth category that will, increasingly,
benefi t from applications that redefi ne the very name of
the category: video games.
The following are a few of the major changes that we believe
will drive the market well into the future and will have a
profound impact on the traditional model of “the cycle.”
Innovative Technology. The innovation sales driver of
2007 was and will continue to be the Nintendo Wii and its
revolutionary controller. Nintendo has simplifi ed gaming
and introduced active interaction into the experience.
The “Wii effect” will continue into the future, with the Wii Fit
exercise and balance platform releasing in May of 2008.
Emerging Genres. The video game business has become
so large and diversifi ed that it is attracting the best of
creative talent producing software that creates new
markets. Guitar Hero, Rock Band, and SingStar are but
three titles that were in such broad market demand that
the question could well be asked, “Are we fully capturing