GameStop's Comments May Mean the Sony PS4 Is Destroying the Xbox One

In its recent third-quarter earnings conference call, GameStop (NYSE: GME  ) treated investors to some juicy details surrounding the battle between the Sony (NYSE: SNE  ) PS4 and Microsoft (NASDAQ: MSFT  ) Xbox One. So just what did management at the nation's largest video-game retailer have to say about the PS4 and Xbox One?

The juicy details

[O]ur sell-through since launch was 80% higher than the total amount of PS3s that we sold in our 2006 fiscal year. Let me repeat that. Our sell-through since launch was 80% higher than the total amount of PS3s that we sold in our 2006 fiscal year. ...

[T]he value of our reservations and additional allocation is 15% higher than the amount of Xbox 360s that we sold during our entire 2005 fiscal year. So we are poised for a powerful launch.

At first glance it appears that those comments from Tony Bartel, GameStop's president, would indicate that Sony's PS4 is putting the smackdown on Microsoft's Xbox One. But the situation is a little more convoluted than meets the eye.

The situation centers on the allocated units, which is simply the amount of systems Microsoft and Sony supplied GameStop with. For Bartel's comments to indicate that the PS4 is indeed winning, you have to assume GameStop was allocated more PS4s then Xbox Ones, or at least the same amount. Regardless of who comes out on top initially, it looks as if these two consoles are just getting started.

A long way from the checkered flag
The Xbox One and PS4 have started off full-throttle. But make no mistake: These two still have a lot of gas left in the tank. GameStop noted that two-thirds of its 33 million Power Up rewards members plan on purchasing a new console in the next 12 months. That's around 22 million consoles that could be sold at GameStop alone, compared with right around 14 million Xbox 360s and PS3s that were sold worldwide in their first full year. While the console battles are in the spotlight today, the real money to be made isn't off these new systems but rather all those old ones collecting dust.

Image: GameStop.

PS3 and Xbox 360 -- come to papa
Investors shouldn't be too distracted by the new, flashy systems, because the real key to new console launches lies in all of those used games and hardware that customers trade in to purchase Xbox Ones and PS4s. GameStop is already seeing a massive inflow of used systems and software that should drive profits. To put this in perspective, GameStop made a 10.2% profit margin for all new hardware sold last quarter, and a 44.5% profit margin on used hardware and software sold. This shows why the company loves customers' used gear: They make four times the profit.

In the following video, Motley Fool analyst Blake Bos dives into all of these details, gives you his investing thesis for GameStop, and presents two ridiculous Amazon.com reviews for the PS4 and Xbox One. 

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  • Report this Comment On November 24, 2013, at 10:17 AM, chuck2233 wrote:

    They don't mention the fact that xbox outsold ps3 so the percentages are skewed

  • Report this Comment On November 24, 2013, at 10:47 AM, Bob0 wrote:

    Forget this nonsense. Just get a Vectrex!

  • Report this Comment On November 24, 2013, at 11:11 AM, virgilcole wrote:

    I eventually buy each console, so I would prefer that they all succeed.

    This "war" between fan-boys about which console is better is just a way for each of them to attempt to receive validation for their opinion because they can only usually afford one console, so they want to believe that the one they picked is the right one.

    Why limit the games you are able to play by hoping one console prevails over another?

    Don't we all win when there is competition?

    Look at EA Sports "Madden" series. Since they entered into the exclusive deal with the NFL they have put out the same football game every year since. They don't need to improve since there is no competition.

    The same would happen to consoles if all but one failed. We would get less quality games on a system that never had any significant upgrades.

    The "big three" creating consoles and competing with one another is a good thing.

  • Report this Comment On November 24, 2013, at 11:31 AM, Evolon73 wrote:

    1st none of the big three Sony, M$, or Nintendo are going anywhere. None of them.

    1) Sony and M$ both sold a million units days one. Regardless of end results that is an undeniable telling that this gen is gonna at least be alright or most likely better.

    2) If you have to measure epeens the only real measurable at this time is that both sold a million day one however Sony did so in only 2 venues Canada & US, versus M$ doing so in 13 countries. That would lend credence to the thought that once launched in those other 11 countries, Sony's number will outpace M$ but it might not be much or maybe a lot. Yet it is just the beginning. And both is doing very well.

    3) The Wii U isn't doing as well. Yet it is doing modest sells not crashing. The Wii sold at a "profit" which no other console can claim, and it sold like wildfire. The Wii alone racked up major sells for Nintendo before even counting it's exclusive arena of inhouse games. Even if the Wii U is underwhelming the handheld 3ds for Nintendo is raking it in. Nintendo doesn't blow through money on new gear like Sony and M$ which means all the talk of Nintendo going software only is in and of itself blogger vaporware.

  • Report this Comment On November 24, 2013, at 11:35 AM, bluesky64 wrote:

    I think it's a bit early to claim that but the real winner will be AMD $ 3.35 with there chip in both items and intc telling ing the street they lost there way and AMD well into there turnaround story I can for see AMD a triple next yr Dec 2014

  • Report this Comment On November 24, 2013, at 11:36 AM, gepet0 wrote:

    The facts are slanted. I usually brought consoles from the brick and mortar stores this year I purchased both from Amazon this year.

    The majority of people I knew did the same. Gamestop has been a turnoff to many by not really offering deals.

    The race will still be close. Too close to tell.

  • Report this Comment On November 24, 2013, at 11:42 AM, gepet0 wrote:

    Also I have a few thousands games. Quite a few from gamestop in the early years even when they bought funcoland..

    Online stores have offered deals too good to be beat.

    The 360 Online Live members demand excellent service. they have for the most part been getting it through live.

    there is a large group vested in The live experience and have a substantial amount of credit on the live network already. The only negative is the higher price but I predict they will have a $400 non Kinect bundle.

  • Report this Comment On November 24, 2013, at 12:47 PM, legendfork wrote:

    Sony and Microsoft both sold 1 million units in one day BUT what people are failing to realize is Sony has only been released in the United States and Microsoft has been released world wide.

    Sony - 1 million in United States ONLY!

    Microsoft - 1 million world wide!

    Sony wins this competition.

  • Report this Comment On November 24, 2013, at 1:03 PM, geemack82 wrote:

    Everybody fails to mention that both systems are sold out everywhere can you find a PlayStation 4 or Xbox one nowhere

  • Report this Comment On November 24, 2013, at 1:21 PM, XXXRackCity wrote:

    how does Sony win just because its released in the US and Xbox was released worldwide. it wasn't released to all the countries yet. Xbox will always be supreme over sony

  • Report this Comment On November 24, 2013, at 1:25 PM, austin wrote:

    i think that the xbox one is better than ps4

  • Report this Comment On November 24, 2013, at 1:27 PM, dolfan1 wrote:

    WOW! Another eye catching headline that with the typical non-story. The ONLY place I see a WAR going on, is between Media writers trying to OUT-SENSATIONALIZE each other with meaningless BS stories of some supposed war.. I don't read MSFT ragging incessantly on Sony, nor Sony ragging on Microsoft. These writers must have worked for the World Wrestling Association previously. The way I see it, both systems are winners, no matter which sells the most. Because when it come down to it, most gamers will eventually OWN both systems, like they do the 360 and PS3.

  • Report this Comment On November 24, 2013, at 2:24 PM, nameanking wrote:

    To the couple of morons who said "Sony sold 1 million in the U.S. alone while it took 13 countries for the Xbox1 to sell out."

    And thus claiming Sony the winner. lmmfao

    Damn fanboys. You do realize that the XboxOne was sold for $100 more than the PS4 right? Lets do the math. Yeah, Microsoft wins this battle.

    Why anybody would buy the Xbox1 over the PS4 is beyond me. They do the same $hit & the PS4 is $100 cheaper. Fanboys, gotta love these damn nerds.

  • Report this Comment On November 24, 2013, at 2:45 PM, SuperMonkeyBall wrote:

    Gamestop has no reason to support Xbone because if Microsoft had gotten its way, Gamestop (already hurting for money as it is) would have seen used-game sales go the way of intelligence in Washington and just disappear.

  • Report this Comment On November 24, 2013, at 3:13 PM, dbenitez30 wrote:

    I'm not really sure how you can compare sales between two consoles when one is sales for 1 country and the other is worldwide sales.

    Yes they both sold 1 million but the market for the xbone was so much larger.

    PS4 is launching more countries this coming week, so ergo even if its a "flop" there the PS4 will still have sold more units.

  • Report this Comment On November 24, 2013, at 4:31 PM, KenLuskin wrote:

    Bad title but a VERY, VERY INTERESTING QUOTE buried in this article:

    >>>"GameStop noted that two-thirds of its 33 million Power Up rewards members plan on purchasing a new console in the next 12 months. That's around 22 million consoles that could be sold at GameStop alone, "<<<

    Since GameStop is primarily a US focused retailer.

    IF the 22 million people who said they "plan" on purchasing a new console is remotely accurate, 2014 console sales will be OFF the charts.

    IDC is estimating 35 million consoles sales for 2014.

    If there are 35 million console sales in 2014 with 90% of them being NEW consoles then AMD is a HUGE winner.

    AMD earns revs/royalties/profits from ALL consoles, except the PS3.

    If 90% of the 2014 console sales are split between PS4 and Xbox One

    AMD's APU is estimated to sell for appx. $100

    That means over 30 million TIMES $100= $ 3 BILLION in revs, and about $600 million in profits, just from AMD's console business.

    This will dwarf PC revs in 2014, that will be about $2.3 Billion.

    China has already announced that if would open up the console floodgates....

    So, the question concerning console sales in 2014 and 2015 should be whether AMD can meet demand?

    Demand could easily exceed 50 million consoles a year, when China is factored into the equation.

  • Report this Comment On November 24, 2013, at 4:50 PM, ShepardRahl wrote:

    "They don't mention the fact that xbox outsold ps3 so the percentages are skewed "

    I'm sure all the RRoD's helped with that. What YOU don't mention is that the PS3 outsold the 360 over the last few years. Either you didn't know that or you conveniently left it out.

    "The only negative is the higher price but I predict they will have a $400 non Kinect bundle. "

    Microsoft has already said they have no intention of selling the xbone without the kinect.

    "The market for the xbone was so much larger"

    The xbone was designed for a larger market. That doesn't mean it will be in one. Microsoft admitted they didn't design the xbone with games in mind and that the dashboard is optimized for ads. Microsoft abandoned the gamers for this all in one crap. Which, if you read the reviews for the xbone, it doesn't do very well.

    "Xbox will always be supreme over sony"

    So supreme their disc drives couldn't take it and exploded and MS has no idea how to handle it.

    "You do realize that the XboxOne was sold for $100 more than the PS4 right? Lets do the math. Yeah, Microsoft wins this battle."

    The xbone is only $100 more because MS is shoving the kinect onto everybody. It being $100 more means nothing anyway. What matters is how big each consoles install base becomes. The PS4 selling over 1 million in the U.S. alone and the xbone selling over 1 million worldwide is a stark contrast. The PS4 releases in more countries next week, all throughout December, and in Japan in February. In the end though the PS4 will be released in over twice as many countries as the xbone. So we'll see.

  • Report this Comment On November 24, 2013, at 4:50 PM, VegasSmitty wrote:

    Why do the writers at the MF always go against MS?

  • Report this Comment On November 24, 2013, at 5:18 PM, fubar2k19 wrote:

    For all those who say XBox 360 sold more that PS3 I disagree and the World wide sales figures prove this. The 360 sold 79.15 million units and the PS3 sold 80.55 million units. The 360 has also been available for a year longer had a much lower price on launch. The 360 also had a 54% fail rate the first year on the market so how many of those 79.15 million units are in fact replacement units. I bought one but had 2 replaced. I would be willing to bet my one unit counts as three in that sales figure. As for my PS3 console. I am still using my backward compatible launch day unit and have never had any problems.

    http://www.vgchartz.com/analysis/platform_totals/

  • Report this Comment On November 24, 2013, at 5:42 PM, normgarry wrote:

    There are two very good articles on PS4 and the XBOX ONE.

    The XBOX ONE wins on media functionality/kinect integration, but the PS4 has stronger hardware graphics support for now. Thing is very few people have a 4K TV and most gamers have 720p TV - with many gamers still using SDTV.

    http://www.epinions.com/review/sony_playstation_4_latest_mod...

    http://www.epinions.com/review/microsoft_xbox_one_latest_mod...

    In NO WAY is the PS4, "killing" anything. Neither system has a breakout launch title - and both are relying heavily on Battlefield 4 and Assassin's Creed to keep buyers from having remorse. KILLZONE:SHADOW FALL is a FAILURE.

  • Report this Comment On November 24, 2013, at 6:00 PM, spinod wrote:

    That's because everyone already has in/out boxes or VCR's, so they want a gaming machine :P

  • Report this Comment On November 24, 2013, at 9:22 PM, Bunnyking77 wrote:

    There are a few things to keep in perspective.

    1. Consumers are pretty smart, especially gamers. The fact that the PS4 is $100 cheaper and more powerful pushing 1080 native resolution graphics while the XBOXone is doing 720 is going to sway a lot of buyers, at least initially. NowI'm not talking about parents buying their kids a console, I'm talking about gamers making decisions on what they want to buy.

    2. A lot of gamers still feel insulted by comments made by a slew of Microsoft staff and all the recent things MS unveiled last minute about their console. For instance a lot of the functionality it promised won't be available at launch while the PS4 can do it right out of the box.

    normgarry's post says it all. neither system has any games worth mentioning as of yet, but based on hardware alone PS4 all the way.

  • Report this Comment On November 24, 2013, at 11:10 PM, mvp wrote:

    who cares who sold out who. As of now we all know that the PS4 is the first console ever to have defects such as DOA on launch. At least the xbox 360 xenon's lasted longer than the PS4. Xenons started the RROD. They decreased the chip size with the Falcons which lessened the RROD, and topped off with the Jasper which DOES NOT RROD. Then moved to the slims which got RDOD. As for the PS3, every version has YLOD, both phat and slim versions. Being that the PS4 had issues on launch as DOA and shutting off within hours of playing to show up as BLOD, this is bad news for Sony. PS4 owners will keep their fingers crossed hoping they don't have a defect. It's not about "it wont happen to me", it's about "when will it happen to me"

    At the end of the day both the PS4 and One will FAIL due to the use of BGA! Welcome to the world of modern electronics, where they all are designed to fail

  • Report this Comment On November 25, 2013, at 1:05 AM, buffadonk wrote:

    but didn't the ps3 do really bad in 06 because of the 699$(I think) price tag?

  • Report this Comment On November 25, 2013, at 1:26 AM, RiddleofSteel wrote:

    Oh, poor, poor Motley Fool. This video must have killed you to make. At 1:45 he talks about the debate about how mobile gaming is going to crush consoles being flat out bogus made me LOL. The website that has been pushing that nonsense is this one. How many articles did the The Fool pump out espousing how mobile gaming is going to crush consoles, and console/PC gaming is dead, only to be smacked down in the comment section by the gaming community.

    The moral of this story is never take advice from a investment website who has a clear conflict of interest when it comes to investment advice, considering the fool is heavily invested themselves into mobile/cloud apps and services, including mobile gaming.

  • Report this Comment On November 25, 2013, at 3:43 AM, doawithlife wrote:

    MS produced a million less units then Sony.

    Hard to sell more then you actually built.

    End all to see the winner. Xbox1 resells for $1100, PS4 resells for $650.

    Which one has the bigger markup?

    That's the real winner.

  • Report this Comment On November 25, 2013, at 5:55 AM, wtfbbqsauce wrote:

    Of course Gamestop has a huge profit on reselling used games. They buy them back for maybe half of the initial cost, if your lucky, and turn around and sell them for about $10 less than the new version.

  • Report this Comment On November 25, 2013, at 5:59 AM, Sargonarhes wrote:

    What hurt or is hurting the Xbone right now is the features they boasted the system has and many gamers weren't happy with it. So bad that Microsoft had to back pedal on that. They couldn't have made it any easier for Sony to take a huge chunk of their usual consumers.

    Ultimately I'll get a PS4 when the bugs have been worked out of them. Rule #1 never buy a first production run of anything.

    Besides, I haven't seen any good games for the Xbox ever.

  • Report this Comment On November 25, 2013, at 6:39 AM, Computerworgen wrote:

    I am not a fanboy of either Sony or Microsoft. My views are based on facts & evidence. It is clear to anybody with a brain that PS4 has outsold the Xbox One in the US & Canada. While Microsoft Fanboys are comparing Global Sales against limited region sales. If you only compare the areas where both are available, you will see that Sony is the clear winner. As for the rest of the PS4 world sales, we will know the final numbers once the PS4 goes on sale where the XBone is sold. We should have the final numbers for 2013 once we hit January 2014. Seems clear to me PS4 is winning this round for the following reasons:

    PS4 vs XBone (Prices do not include taxes)

    1: $399 vs $499.

    2: 1080p vs 720p.

    3: $459 for PS4 With 1 Game of your choice vs $499 for XBone with Mandatory Kinect.

    Also, Console Sales do not win Wars. this is just an Opening battle between the 2 Gaming Giants. Great Games win wars, not console sales. Once the Christmas Shopping season is over, we'll know who won the first round when BOTH consoles are available Globally.

  • Report this Comment On November 25, 2013, at 8:09 AM, hmsthehood wrote:

    Isn't a large part of Gamestop's income second hand games?

    Didn't Microsoft try to shut that end of the business down?

    Could Gamestop have a motive to sell more PS4s?

  • Report this Comment On November 25, 2013, at 2:44 PM, mindriot wrote:

    What this article fails to mention and some of the posters on here fail to comprehend are these facts:

    While both companies have boasted over the number of one million and it is indeed true that the PS4's numbers may actually look better than the XBox One due to the fact that the PS4 was made available in fewer countries.

    But what many fail to understand is that although the XBox One was made available in more territories the number of units shipped by BOTH companies has been sold through. What this means is that if Microsoft launched the XBox One solely in North America the end result would be the same being that it would have sold out. I have many friends who can't get an XBox One due to the fact that it simply isn't available right now.

  • Report this Comment On November 25, 2013, at 3:12 PM, mindriot wrote:

    Again, you CAN NOT compare the numbers by territories! You have to compare the number by overall units sold! If Sony only makes their product available in a smaller amount of locations it does not diminish the fact that Microsoft sold the same number in a greater amount of territories if the allotted units for each company are the same.

    Sony knows that North America is predominantly favorable towards Microsoft so they made a wise decision to make the most amount of units available here. It doesn't meant they have won the "war".

  • Report this Comment On November 25, 2013, at 3:39 PM, ShepardRahl wrote:

    "KILLZONE:SHADOW FALL is a FAILURE."

    How is Killzone a failure? Oh, that's right, you don't know. Otherwise you would have tried to back up your statement. Killzone is a beautiful game. 1080p 60fps and no performance issues whatsoever. Let's contrast that with Ryse: Son of Rome which after having to have it's specs downgraded and poor game play reviews was dubbed a failure before it was even released. And Dead Rising 3 which also had to be downgraded, struggles to maintain a constant frame rate, and can't handle more than two people on co-op or it bugs out. Let's take a look at some review scores:

    Killzone:

    Destructoid: 9/10 IGN: 8/10 GT: 8.8 GameReactor: 8/10 GameSpot: 7/10 Joystiq: 3.5/5

    Ryse: Son of Rome:

    Destructoid: 5/10 IGN: 6.8/10 GT: 6.8 GameReactor: 5/10 Gamespot: 4/10 Joystiq: 2.5/5

    Dead Rising 3:

    Destructoid: 9/10 IGN: 8/10 GT: 8.0 GameReactor: 8/10 GameSpot: 7/10 Joystiq: 3.5/5

    Plus almost all of the multiplats are rated higher for the PS4.

    But Killzone is the failure so nevermind all that.

    "the PS4 has stronger hardware graphics support for now"

    For now? If you mean for this new generation then yes.

    "As of now we all know that the PS4 is the first console ever to have defects such as DOA on launch."

    I'm sure there are a lot of people that want this to be true but it isn't. The "Blue Light" problems are not the first time gaming consoles have had malfunctions at launch. According to a study done by CNET UK, 60% of Microsoft's Xbox 360 consoles experienced failure with the RRoD. Also every xbone is a DOA brick until you download the day 1 update. And all of the tv functionality that MS worked into it only works in the U.S. So if you live out of the country that part of the xbone is DOA no matter what. So yeah. Sorry.

    "PS4 owners will keep their fingers crossed hoping they don't have a defect. It's not about "it wont happen to me", it's about "when will it happen to me"'

    I have one of the original 60gb launch PS3's and have never had a problem with it. And my PS4 is working perfectly. The YLoD failure rate on the PS3's was only 16% compared to the over 60% for the 360. PS4 owners are doing fine. It's the people that bought an xbone that should actually expect a defect with the increasing number of disc drive defect complaints.

    "Which one has the bigger markup? That's the real winner."

    Going by what morons paid for each console on eBay on day one does not constitute a legitimate mark up assessment.

    "If Sony only makes their product available in a smaller amount of locations it does not diminish the fact that Microsoft sold the same number in a greater amount of territories if the allotted units for each company are the same."

    The PS4 releases in more countries Friday, all throughout December, and in Japan in February. In the end though the PS4 will be released in over twice as many countries as the xbone.

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