GameStop 2012 Annual Report Download - page 36

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alternative sites or additional sites for new store expansion in a timely manner. Our revenues and earnings may
decline if we fail to maintain existing store locations, enter into new leases, locate alternative sites or find
additional sites for new store expansion.
Restrictions on our ability to take trade-ins of and sell pre-owned video game products or pre-owned mobile
devices could negatively affect our financial condition and results of operations.
Our financial results depend on our ability to take trade-ins of, and sell, pre-owned video game products and
pre-owned mobile devices within our stores. Actions by manufacturers or publishers of video game products or
mobile devices or governmental authorities to prohibit or limit our ability to take trade-ins or sell pre-owned
video game products or mobile devices, or to limit the ability of consumers to play pre-owned video games,
could have a negative impact on our sales and earnings.
Sales of video games containing graphic violence may decrease as a result of actual violent events or other
reasons, and our financial results may be adversely affected as a result.
Many popular video games contain material with graphic violence. These games receive an “M” or “T”
rating from the Entertainment Software Ratings Board. As actual violent events occur and are publicized, such as
the recent shootings at Newtown, Connecticut, or for other reasons, public acceptance of graphic violence in
video games may decline. Consumer advocacy groups may increase their efforts to oppose sales of graphically-
violent video games and may seek legislation prohibiting their sales. As a result, our sales of those games may
decrease, which could adversely affect our financial results.
An adverse trend in sales during the holiday selling season could impact our financial results.
Our business, like that of many retailers, is seasonal, with the major portion of our sales and operating profit
realized during the fourth fiscal quarter, which includes the holiday selling season. During fiscal 2012, we
generated approximately 40% of our sales during the fourth quarter. Any adverse trend in sales during the
holiday selling season could lower our results of operations for the fourth quarter and the entire fiscal year.
Our results of operations may fluctuate from quarter to quarter, which could affect our business, financial
condition and results of operations.
Our results of operations may fluctuate from quarter to quarter depending upon several factors, some of
which are beyond our control. These factors include:
• the timing and allocations of new product releases including new console launches;
• the timing of new store openings or closings;
• shifts in the timing of certain promotions;
• the effect of changes in tax rates in the jurisdictions in which we operate;
• acquisition costs and the integration of companies we acquire or invest in;
• the mix of earnings in the countries in which we operate;
• the costs associated with the exit of unprofitable markets or stores; and
• changes in foreign currency exchange rates.
These and other factors could affect our business, financial condition and results of operations, and this
makes the prediction of our financial results on a quarterly basis difficult. Also, it is possible that our quarterly
financial results may be below the expectations of public market analysts.
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