GameStop 2010 Annual Report Download - page 32

Table of Contents
print, free of charge, upon written request to the Company's Investor Relations Department at GameStop Corp., 625 Westport Parkway, Grapevine,
Texas 76051.
Item 1A. Risk Factors
An investment in our Company involves a high degree of risk. You should carefully consider the risks below, together with the other
information contained in this report, before you make an investment decision with respect to our Company. The risks described below are not the
only ones facing our Company. Additional risks not presently known to us, or that we consider immaterial, may also impair our business operations.
Any of the following risks could materially adversely affect our business, operating results or financial condition, and could cause a decline in the
trading price of our common stock and the value of your investment.
Risks Related to Our Business
We depend upon our key personnel and they would be difficult to replace.
Our success depends upon our ability to attract, motivate and retain key management for our stores and skilled merchandising, marketing,
financial and administrative personnel at our headquarters. We depend upon the continued services of our key executive officers: Daniel A.
DeMatteo, our Executive Chairman; J. Paul Raines, our Chief Executive Officer; Tony D. Bartel, our President; Robert A. Lloyd, our Executive
Vice President and Chief Financial Officer; and Michael Mauler, our Executive Vice President-International. The loss of services of any of our key
personnel could have a negative impact on our business.
We depend upon the timely delivery of products.
We depend on major hardware manufacturers, primarily Sony, Nintendo and Microsoft, to deliver new and existing video game platforms and
new innovations on a timely basis and in anticipated quantities. In addition, we depend on software publishers to introduce new and updated
software titles. Any material delay in the introduction or delivery, or limited allocations, of hardware platforms or software titles could result in
reduced sales in one or more fiscal quarters.
We depend upon third parties to develop products and software.
Our business depends upon the continued development of new and enhanced video game platforms and accessories, PC hardware and video
game and PC entertainment software. Our business could suffer due to the failure of manufacturers to develop new or enhanced video game
platforms, a decline in the continued technological development and use of multimedia PCs, or the failure of software publishers to develop popular
game and entertainment titles for current or future generation video game systems or PC hardware.
Our ability to obtain favorable terms from our suppliers may impact our financial results.
Our financial results depend significantly upon the business terms we can obtain from our suppliers, including competitive prices, unsold
product return policies, advertising and market development allowances, freight charges and payment terms. We purchase substantially all of our
products directly from manufacturers, software publishers and, in some cases, distributors. Our largest vendors worldwide are Microsoft, Nintendo,
Sony, Activision and Electronic Arts, which accounted for 18%, 16%, 16%, 12% and 10%, respectively, of our new product purchases in fiscal
2010. If our suppliers do not provide us with favorable business terms, we may not be able to offer products to our customers at competitive prices.
If our vendors fail to provide marketing and merchandising support at historical levels, our sales and earnings could be negatively impacted.
The manufacturers of video game hardware and software and PC entertainment software have typically provided retailers with significant
marketing and merchandising support for their products. As part of this support, we receive cooperative advertising and market development
payments from these vendors. These cooperative advertising and market development payments enable us to actively promote and merchandise the
products we sell 16