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10
owned video game products than margins on new software. These programs provide us with an inventory of pre-owned and value
video game products which we resell to our more value-oriented customers. In addition, our highly-customized inventory
management system allows us to actively manage the pricing and product availability of our pre-owned and value video game
products across our store base and to reallocate our inventory as necessary. Our trade-in program also allows us to be one of the
only suppliers of previous generation platforms and related video games. We also operate refurbishment centers in the U.S., Canada,
Australia and Europe, where defective video game products can be tested, repaired, relabeled, repackaged and redistributed back
to our stores.
Video Game Accessories. Video game accessories consist primarily of controllers, gaming headsets, memory cards and
other add-ons for use with video game hardware and software.
Digital. The proliferation of online game play through Microsoft Xbox Live, the PlayStation Network and PC gaming
Web sites has led to consumer demand for subscription, time and points cards (“digital currency”) as well as digitally downloadable
content ("DLC"), for existing console video games. We sell a wide variety of digital currency and we have developed technology
to sell DLC in our stores and on our U.S. Web site. We believe we are the worldwide leading retailer of digital currency sales and
the sale of DLC for Xbox Live and the PlayStation Network. We believe that we are frequently the leading seller of DLC for most
major game titles.
Mobile and Consumer Electronics. Our mobile and consumer electronics business consists of the sale of new smartphones,
tablets, headphones and accessories and buying, selling and trading of select pre-owned smartphones, tablets and MP3 players in
our U.S. stores and in a majority of stores in our international markets. Beginning in November 2013, this product category also
includes the revenues generated in our Spring Mobile, Aio Wireless and Simply Mac stores from the sales of wireless products
and services and Apple and other consumer electronics.
Other Products. We purchase PC entertainment software from over 20 publishers, including Electronic Arts, Microsoft
and Activision. We offer PC entertainment software across a variety of genres, including Sports, Action, Strategy, Adventure/Role
Playing and Simulation. We also carry strategy guides, magazines and gaming-related toys, such as Skylanders from Activision.
Store Operations
As of February 1, 2014, we operated 6,675 stores, primarily under the names GameStop, EB Games and Micromania. We
design our stores to provide an electronic gaming atmosphere with an engaging and visually captivating layout. Our stores are
typically equipped with several video game sampling areas, which provide our customers the opportunity to play games before
purchase, as well as equipment to play video game clips. We use store configuration, in-store signage and product demonstrations
to produce marketing opportunities both for our vendors and for us.
Our Video Game Brands stores average approximately 1,400 square feet and carry a balanced mix of new and pre-owned
and value video game products and mobile products. Our Technology Brands stores range between 900 and 2,600 square feet and
carry wireless products and accessories and, in Simply Mac stores, Apple and other consumer electronics. Our stores are generally
located in high-traffic “power strip centers,” local neighborhood strip centers, high-traffic shopping malls and pedestrian areas,
primarily in major metropolitan areas. These locations provide easy access and high frequency of visits and, in the case of strip
centers and high-traffic pedestrian stores, high visibility. We target strip centers that are conveniently located, have a mass merchant
or supermarket anchor tenant and have a high volume of customers.
Site Selection and Locations
Site Selection. Site selections for new stores are made after an extensive review of demographic data, including data from
our PowerUp Rewards loyalty program, and other information relating to market potential, competitor access and visibility,
compatible nearby tenants, accessible parking, location visibility, lease terms and the location of our other stores. Spring Mobile
and Aio Wireless stores are selected after approval from AT&T. Simply Mac stores are selected using input from Apple. Most of
our stores are located in highly visible locations within malls and strip centers. In each of our geographic segments, we have a
dedicated staff of real estate personnel experienced in selecting store locations.