So much for all the doom and gloom. GameStop today reported its financial results for the second quarter of 2014, announcing $1.73 billion in total global sales. That's a 25.1% increase compared to $1.38 billion in the prior year quarter. The company's net earnings for the second quarter were $24.6 million, a 134% increase compared to net earnings of $10.5 million in the prior year quarter.
Much of the video game retailer's financial success can be attributed to new hardware sales which increased 124.8%. GameStop notes that worldwide demand for Microsoft's Xbox One and Sony's PlayStation 4 remains "very high."
On the software front, sales also grew, but by a much less margin. GameStop reported a sales increased of 15.6% which was driven "by the strong performance of recently released new titles," such as Ubisoft's Watch Dogs and Nintendo's Mario Kart 8.
“The second quarter demonstrates the power of the new console cycle and all of our business units, including Technology Brands, positively contributing to the company’s sales and profits,” said GameStop CFO Rob Lloyd. “The back half of the year is filled with exciting games and products coming to market and I am confident that we are prepared to capitalize on these opportunities.”
While I understand an increase in hardware sales, I admit I'm somewhat surprised software also saw an increase given the emphasis on digital purchasing and downloading. Since the release of the Xbox One and PS4, more and more publishers have opted to offer digital purchasing as both a convenience for customers and a way to combat GameStop's used games business which publishers argue hurts overall sales. It's clear though, that despite how much publishers try to push it, there's still demand for brick and mortar video game retailers.