GameStop 2011 Annual Report Download - page 21

expanding our sales of used video game products and expanding our market leadership position by focusing on
the launch of new hardware platforms as well as physical and digital software titles.
•Increase GameStop Brand Awareness and Loyalty Membership. Substantially all of GameStop’s
U.S. and European stores are operated under the GameStop name, with the exception of the Micromania
stores acquired in France. In 2007, GameStop introduced its new brand tagline “Power to the Players”
and launched a television, radio and newspaper advertising campaign to increase awareness of the
GameStop brand. Building the GameStop brand has enabled us to leverage brand awareness and to
capture advertising and marketing efficiencies. Our branding strategy is further supported by the
GameStop PowerUp Rewards loyalty program and our Web sites. The PowerUp Rewards loyalty
program was launched in 2010 and offers our customers the ability to sign-up for a free or paid
membership that offers points earned on purchases which can be redeemed for discounts or merchandise.
Through PowerUp Rewards, our customers have access to unique, video-game related rewards
unavailable through any other retailer. The program’s paid membership also includes a subscription to
Game Informer magazine, additional discounts on used merchandise in our stores and additional credit on
trade-ins of used games. As of January 28, 2012, we had 15.9 million members in the PowerUp Rewards
program, approximately half of which were paid members. In total, our loyalty programs around the
world had over 22 million members. Our Web sites allow our customers to buy games online, reserve or
pick-up merchandise in our stores and to learn about the latest video game products and PC entertainment
software and their availability in our stores. We intend to increase customer awareness of our brands. In
connection with our brand-building efforts, in each of the last three fiscal years, we increased the amount
of media advertising in targeted markets. In the 53 weeks ending February 2, 2013 (“fiscal 2012”), we
plan to continue to aggressively promote the GameStop PowerUp Rewards loyalty program and increase
brand awareness over a broader demographic area in order to promote our unique buying experience
in-store for new and used hardware and software, trade-ins of used video game products and to leverage
our Web sites at www.gamestop.com, www.ebgames.com.au, www.gamestop.ca, www.gamestop.it,
www.gamestop.es, www.gamestop.ie, www.gamestop.de, www.gamestop.co.uk, www.micromania.fr and
www.gameinformer.com, the online video gaming Web site www.kongregate.com and our digital PC
distribution platform available at www.gamestop.com/pcgames.
•Increase Sales of Used Video Game Products. We believe we are the largest retailer of used video game
products in the world and carry the broadest selection of used video game products for both current and
previous generation platforms, giving us a unique advantage in the video game retail industry. The
opportunity to trade in and purchase used video game products offers our customers a unique value
proposition generally unavailable at most mass merchants, toy stores and consumer electronics retailers.
We obtain most of our used video game products from trade-ins made in our stores by our customers. We
will continue to expand the selection and availability of used video game products in our stores. Used
video game products generate significantly higher gross margins than new video game products. Our
strategy consists of increasing consumer awareness of the benefits of trading in and buying used video
game products at our stores through increased marketing activities and the use of both broad and targeted
marketing to our PowerUp Rewards members. We expect the continued sale of new platform technology
and software to drive trade-ins of older video game products, thereby expanding our supply of used video
game products.
•Expand our Digital Growth Strategy to Protect and Expand our Market Leadership Position. We expect
that future growth in the video game industry will be driven by the sale of video games delivered in
digital form and the expansion of other forms of gaming. We currently sell various types of products that
relate to the digital category, including Xbox Live, PlayStation and Nintendo network point cards, as well
as prepaid digital and online timecards and digitally downloadable software. We operate an online video
game platform called Kongregate.com and we acquired a digital PC distribution platform, Impulse, and a
streaming technology company, Spawn Labs, during the 52 weeks ended January 28, 2012 (“fiscal
2011”). We continue to make significant investments in e-commerce, digital delivery systems, online
video game aggregation, digital kiosks and in-store and Web site functionality to enable our customers to
access digital content and eliminate friction in the digital sales and delivery process. We plan to continue
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