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    GameStop Reports Record 2010 First Quarter Sales and Earnings
    New Software Sales Increase 13%
    Earnings Per Share Grow 14%

    GRAPEVINE, Texas, May 20, 2010 (BUSINESS WIRE) --GameStop Corp. (NYSE: GME), the world's largest video game and entertainment software retailer, today reported sales and earnings for the first quarter ended May 1, 2010.

    Financial Results

    Total sales for the first quarter increased 5.1% to $2.08 billion, in comparison to $1.98 billion in the prior year quarter. Comparable store sales decreased 1.6%, due to a decline in hardware price points and hardware supply constraints. However, new video game software sales increased 13.3%, driven by a very strong slate of new games with Battlefield Bad Company 2 from Electronic Arts, Sony's God of War III, Final Fantasy XIII by Square Enix, Pokèmon SoulSilver and HeartGold from Nintendo, and Take 2's Bioshock 2 making up the top sellers.

    Net earnings for the first quarter increased 6.8% to $75.2 million, as compared to net earnings of $70.4 million, including debt retirement costs of $2.9 million ($1.8 million, net of tax benefits) in the prior year quarter. Diluted earnings per share increased 14.3% to $0.48, as compared to $0.42 in the prior year quarter, including debt retirement costs of $0.01 per diluted share. Over the past four years, first quarter earnings have grown at a compounded annual growth rate of 62%.

    Daniel DeMatteo, GameStop's Chief Executive Officer, stated, "I am pleased that our earnings have achieved the high end of guidance and total company sales have exceeded $2 billion for the first time in a non-holiday quarter. By maintaining a sharp focus on our customer needs and overall business execution, our strong brick and mortar business continues to provide the capital needed to invest in new stores as well as execute our strategic plan to incorporate digital gaming into our global operations.

    "The in-store Legends of Zork test proved highly successful in economically acquiring and converting our customers to browser game players. Additionally, at the end of this month, GameStop will be marketing and selling downloadable content in a group of test stores. Of equal importance, our new customer loyalty program will launch in select markets. Altogether, we continue to deliver a superior shopping experience and are introducing our customers to the digital options for gaming."

    Paul Raines, Chief Operating Officer, said, "Our store associates did an outstanding job of executing our 'Go Big' marketing campaigns to promote hot new titles. Their effectiveness can be measured by the significant day one, week one and overall market share GameStop captured of this quarter's new releases. Our unique buy-sell-trade model continues to provide a strong value proposition for new game buyers."

    Updated Guidance

    For the second quarter of fiscal 2010, the company expects comparable store sales to range from -2.0% to +2.0%. Diluted earnings per share are expected to range from $0.25 to $0.27, a 9% to 17% increase over the prior year quarter.

    Based on our current industry analysis and expected strength of several upcoming new video game software releases, the company is projecting third quarter fiscal 2010 diluted earnings per share to range from $0.38 to $0.41, a 19% to 28% increase over the prior year quarter.

    GameStop is reiterating its full year diluted earnings per share guidance range of $2.58 to $2.68, representing a 14% to 18% increase over fiscal 2009. Full year comparable store sales are still expected to range from flat to +2.0%.

    About GameStop

    Headquartered in Grapevine, TX, GameStop Corp., a Fortune 500 and S&P 500 company, is the world's largest video game and entertainment software retailer. The company operates 6,486 retail stores in 17 countries worldwide. The company also operates e-commerce sites, including GameStop.com, and publishes Game Informer(R) magazine, a leading multi-platform video game publication. GameStop Corp. sells new and used video game software, hardware and accessories for video game systems from Sony, Nintendo, and Microsoft. In addition, the company sells PC entertainment software, related accessories and other merchandise. General information on GameStop Corp. can be obtained at the company's corporate website: http://www.gamestopcorp.com.

    Safe Harbor

    This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements may include, but are not limited to, the outlook for fiscal 2010, future financial and operating results, projected store openings, the company's plans, objectives, expectations and intentions, and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of GameStop's management and are subject to significant risks and uncertainties. Actual results may differ from those set forth in the forward-looking statements. GameStop undertakes no obligation to publicly update or revise any forward-looking statements. The following factors, among others, could cause actual results to differ from those set forth in the forward-looking statements: the inability to obtain sufficient quantities of product to meet consumer demand, including console hardware; the timing of release of video game titles for next generation consoles; the risks associated with expanded international operations and the integration of acquisitions; the impact of increased competition and changing technology, including alternative methods of distribution, in the video game industry; and economic and other events that could reduce or impact consumer demand. Additional factors that could cause GameStop's results to differ materially from those described in the forward-looking statements can be found in GameStop's Annual Report on Form 10-K for the fiscal year ended January 30, 2010 filed with the SEC and available at the SEC's Internet site at http://www.sec.gov or http://investor.gamestop.com.

    GameStop Corp.
    Statements of Operations
    (in thousands, except per share data)
    13 weeks 13 weeks
    ended ended
    May 1, 2010 May 2, 2009
    Sales $ 2,082,697 $ 1,980,753
    Cost of sales 1,511,916 1,438,640
    Gross profit 570,781 542,113
    Selling, general and administrative
    expenses 403,836 375,832
    Depreciation and amortization 42,513 37,827
    Operating earnings 124,432 128,454
    Interest expense, net 9,574 11,681
    Debt extinguishment expense 0 2,862
    Earnings before income
    tax expense 114,858 113,911
    Income tax expense 40,019 43,478
    Consolidated net income 74,839 70,433
    Net loss attributable to noncontrolling interests 333 -
    Consolidated net income attributable to GameStop $ 75,172 $ 70,433
    Net income per common share:
    Basic1 $ 0.49 $ 0.43
    Diluted1 $ 0.48 $ 0.42
    Weighted average common shares
    outstanding:
    Basic 153,566 164,474
    Diluted 156,484 167,972

    Percentage of Sales:

    Sales 100.0 % 100.0 %
    Cost of sales 72.6 % 72.6 %
    Gross profit 27.4 % 27.4 %
    SG&A expenses 19.4 % 19.0 %
    Depreciation and amortization 2.0 % 1.9 %
    Operating earnings 6.0 % 6.5 %
    Interest expense, net 0.5 % 0.6 %
    Debt extinguishment expense 0.0 % 0.1 %
    Earnings before income
    tax expense 5.5 % 5.8 %
    Income tax expense 1.9 % 2.2 %
    Consolidated net income 3.6 % 3.6 %
    Net loss attributable to noncontrolling interests 0.0 % 0.0 %
    Consolidated net income attributable to GameStop 3.6 % 3.6 %

    1 Basic net income per share and diluted net income per share are calculated based on consolidated net income attributable to GameStop.

    GameStop Corp.
    Balance Sheets
    (in thousands, except per share data)
    May 1, May 2,
    2010 2009
    ASSETS:
    Current assets:
    Cash and cash equivalents $ 431,878 $ 230,255
    Receivables, net 36,031 47,265
    Merchandise inventories 1,152,043 1,160,769
    Prepaid expenses and other current assets 99,828 69,792
    Deferred taxes 16,561 19,000
    Total current assets 1,736,341 1,527,081
    Property and equipment:
    Land 11,655 10,801
    Buildings & leasehold improvements 530,188 473,654
    Fixtures and equipment 731,134 645,051
    1,272,977 1,129,506
    Less accumulated depreciation and amortization 697,645 570,062
    Net property and equipment 575,332 559,444
    Goodwill, net 1,941,306 1,873,503
    Other noncurrent assets 282,392 291,125
    Total assets $ 4,535,371 $ 4,251,153
    LIABILITIES AND STOCKHOLDERS' EQUITY:
    Current liabilities:
    Accounts payable $ 767,490 $ 775,554
    Accrued liabilities 517,912 454,360
    Total current liabilities 1,285,402 1,229,914
    Other long-term liabilities 122,549 108,212
    Senior notes payable, net of discount 447,567 495,571
    Total liabilities 1,855,518 1,833,697
    Stockholders' equity:
    Preferred stock - authorized 5,000 shares; no shares
    issued or outstanding -- --
    Class A common stock - $.001 par value; authorized 300,000 shares;
    152,853 and 164,622 shares outstanding, respectively 153 165
    Additional paid-in-capital 1,091,852 1,317,100
    Accumulated other comprehensive income 115,411 9,268
    Retained earnings 1,472,927 1,090,923
    Equity attributable to GameStop Corp. stockholders 2,680,343 2,417,456
    Equity attributable to noncontrolling interest (490 ) -
    Total equity 2,679,853 2,417,456
    Total liabilities and stockholders' equity $ 4,535,371 $ 4,251,153
    Schedule I
    GameStop Corp.
    Sales Mix
    13 Weeks Ended 13 Weeks Ended
    May 1, 2010 May 2, 2009
    Percent Percent
    Sales of Total Sales of Total
    Sales (in millions):
    New video game hardware $ 348.3 16.7 % $ 395.9 20.0 %
    New video game software 873.1 41.9 % 770.5 38.9 %
    Used video game products 570.8 27.4 % 548.5 27.7 %
    Other 290.5 14.0 % 265.9 13.4 %
    Total $ 2,082.7 100.0 % $ 1,980.8 100.0 %
    Schedule II
    GameStop Corp.
    Gross Profit Mix
    13 Weeks Ended 13 Weeks Ended
    May 1, 2010 May 2, 2009
    Gross Gross
    Gross Profit Gross Profit
    Profit Percent Profit Percent
    Gross Profit (in millions):
    New video game hardware $ 21.2 6.1 % $ 24.1 6.1 %
    New video game software 174.5 20.0 % 165.5 21.5 %
    Used video game products 274.4 48.1 % 263.6 48.1 %
    Other 100.7 34.7 % 88.9 33.4 %
    Total $ 570.8 27.4 % $ 542.1 27.4 %

    SOURCE: GameStop Corp.

    Media Contact:
    Chris Olivera
    Vice President,
    Corporate Communications
    GameStop Corp.
    (817) 424-2130
    or
    Investor Contact:
    Matt Hodges
    Director,
    Investor Relations
    GameStop Corp.
    (817) 424-2130