AfterDawn: News

Halo 3 helps lift Hastings Entertainment to 3rd quarter profit

Retailer Hastings Entertainment is reporting a third quarter profit for the first time since becoming a publicly traded company nearly a decade ago in 1998.

Like many retailers, Hastings' third quarter revenue was boosted by the release of Halo 3 for the Xbox 360. This also spurred increased sales of the Xbox 360 console.



Another good sign for the company was an increase in DVD revenue, with sales of both new and used titles improving. At the same time rentals took a hit, which Hastings executives blame partially on the titles being released and partially on consumer preferences shifting away from rental in favor of purchasing DVDs.

Not surprisingly, music revenue was down due to declining CD sales.

“For the first time in Hastings’ history as a public company, we earned a profit in the third quarter,” Hastings CEO John Marmaduke said. “In what continues to be a challenging retail environment in music and rental, we were able to improve pre-tax profits by $3.7 million from the third quarter of last year. Our merchandising and buying teams have produced greater margin rates in new and used products for the third consecutive quarter. We will continue our focus on margin and inventory management. This, coupled with a continued focus on cost controls, has positioned us for continued revenue and income growth in the fourth quarter.”

Source: Video Business

Written by: Rich Fiscus @ 20 Nov 2007 10:14

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• 12 comments

• ZippyDSM

  I wonder if it would have done as well if the game was 30$, IMO gams are over priced and no different than DVDs only games have a better reason to be 20-30$
  
  At 30 you would sale 3 or 4X more so its not like MS would lose any moeny from it.

  20.11.2007 11:15 #1

• Moomoo2

  Zippy you are so cheaaap...

  20.11.2007 12:04 #2

• ZippyDSM

  Originally posted by Moomoo2: Zippy you are so cheaaap...Oh really so movies should never be below 20 and games may never be below 60$ because they offer high qauilty exelances, BS look at the cost of production and pressing they are getting 2-10X profits off what we buy because they can sell them in high quantiles, I am not being cheap as much as pragmatic over the profterring going on by the media mafias.

  20.11.2007 12:12 #3

• emugamer

  I guess I'm cheap too ;-) I won't pay $60 for a game. Even if it means waiting a few months after realease and then buying it used for about $20 less. Sometimes even half the price.

  20.11.2007 12:22 #4

• ZippyDSM

  Originally posted by emugamer: I guess I'm cheap too ;-) I won't pay $60 for a game. Even if it means waiting a few months after realease and then buying it used for about $20 less. Sometimes even half the price.Halo 3 wont be 20$ or less for a year or 2 :P
  
  Altho by then you could pick up a 360 8 games and halo 3 for 150$ :P

  20.11.2007 12:27 #5

• voyager

  I think that Halo3 is bundle with Xbox360 for this holiday season.

  23.11.2007 17:58 #6

• wetsparks

  Quote:Originally posted by Moomoo2: Zippy you are so cheaaap...Oh really so movies should never be below 20 and games may never be below 60$ because they offer high qauilty exelances, BS look at the cost of production and pressing they are getting 2-10X profits off what we buy because they can sell them in high quantiles, I am not being cheap as much as pragmatic over the profterring going on by the media mafias.There is one thing wrong with your math there Zippy. The developers don't get $60 per game. Some of that money goes to the stores, some goes to the developers, some go to the publisher, some to the company who's system the game is made for. So that $60 is split, for Halo 3, between Best Buy, Bunjie, and Microsoft twice (once for publishing the title, once because the game was released on their system). Say that Best Buy gets $20 per sale. That leaves $40. Now Microsoft gets two cuts from that $40, say $5 for the game being on their system and $10 for publishing it. That leaves Bunjie with $25 per game sold. IF, and that is a big if, the game sells 8 million copies, by my guess work math, Bunjie will get $200,000,000 million dollars in sales. Pretty damn good, until you figure that the government will take at least 33%. So then $144,000,000 million dollars and then take out production costs.....you see my point. They make good money on huge hits, but on smaller games, they don't make the huge profits that you think they do.

  23.11.2007 21:46 #7

• howy_2005

  thank you wetsparks for your comment...thought there for a bit everyone out there might be idiots...

  26.11.2007 05:58 #8

• ZippyDSM

  Quote:Quote:Originally posted by Moomoo2: Zippy you are so cheaaap...Oh really so movies should never be below 20 and games may never be below 60$ because they offer high qauilty exelances, BS look at the cost of production and pressing they are getting 2-10X profits off what we buy because they can sell them in high quantiles, I am not being cheap as much as pragmatic over the profterring going on by the media mafias.There is one thing wrong with your math there Zippy. The developers don't get $60 per game. Some of that money goes to the stores, some goes to the developers, some go to the publisher, some to the company who's system the game is made for. So that $60 is split, for Halo 3, between Best Buy, Bunjie, and Microsoft twice (once for publishing the title, once because the game was released on their system). Say that Best Buy gets $20 per sale. That leaves $40. Now Microsoft gets two cuts from that $40, say $5 for the game being on their system and $10 for publishing it. That leaves Bunjie with $25 per game sold. IF, and that is a big if, the game sells 8 million copies, by my guess work math, Bunjie will get $200,000,000 million dollars in sales. Pretty damn good, until you figure that the government will take at least 33%. So then $144,000,000 million dollars and then take out production costs.....you see my point. They make good money on huge hits, but on smaller games, they don't make the huge profits that you think they do.
  more like retail gets less,much less,publisher makes off with with a good bit leaving the dev about half of the total, heres something to consider at 20-30$ off you push more product so much so you wont lose them when they get liquidated when it comes time for retail chains to to bring in the new games, changing the price dose more than force them to sell more at a "loss", retail would be getting more money because they can add 2-8$ more meaning they can then buy more games.
  
  Much like music prices gaming is stagnated and un invoateved, look at digital sales when you get less product and more hassle for the same or more than retail, the prices are wrong.
  
  Sure DVDs sale 5-10X as many copies but they are everywhere,games dont need to be 3-4X the price, a max of 40 would better better for the industry even more so since they are protected from bad game sales since retail picks that bomb up,if consumers we given the chance to return bad games then a 50-70$ price tag is reasonable, they are not protected from poor sales as much,but then how many indapendats are there left anymore..with the lusting after OTT graphics the industry craves for mainstream gaming.....the only devs left are the ones constantly chewed up and spat out of conglomerates half of witch owned by hollywood...
  
  The consumer cant really vote with his wallet anymore sicne the media mafia has made it imposable to return goods you could 10+ years ago and like any other item be checked and then put back out the shelfs or sent to resale/liquidation/defect,only in the last 10ish years has media(CDs,tapes,DVDs,games) become so "special" you can't return it and at these prices theres no damn reason not to..
  
  
  (speaking o'which Crysis pawns halo 1...2...and 3 :X)

  26.11.2007 06:35 #9

• wetsparks

  You can't return movies/music/games because it is so easy for someone to copy them. Hell, Microsoft even packages Windows Media in every computer and anyone with two braincells can rip a cd using it. So you could easily buy cd, go home, rip it in 5 minutes and return it. Same with movies, though it may take 15-20 minutes to rip to your hard drive. If it were as simple as lowering the prices for a game to sell substantially more copies, why is then that when a game becomes a greatest hit, $20, it doesn't double sales? People who want to get the game will get it when it comes out or not long after. People who don't want the game won't get it. Lets take God of War for example. I have it, love it. One of my friends has it, loves it. Another friend loves those types of games, but doesn't want to play it, even for $20.

  26.11.2007 15:32 #10

• ZippyDSM

  Originally posted by wetsparks: You can't return movies/music/games because it is so easy for someone to copy them. Hell, Microsoft even packages Windows Media in every computer and anyone with two braincells can rip a cd using it. So you could easily buy cd, go home, rip it in 5 minutes and return it. Same with movies, though it may take 15-20 minutes to rip to your hard drive. If it were as simple as lowering the prices for a game to sell substantially more copies, why is then that when a game becomes a greatest hit, $20, it doesn't double sales? People who want to get the game will get it when it comes out or not long after. People who don't want the game won't get it. Lets take God of War for example. I have it, love it. One of my friends has it, loves it. Another friend loves those types of games, but doesn't want to play it, even for $20.
  It was easy to copy them 10+ years ago(tape/CD/VHS) the only thing is they saw the minor loss of profit from it and retail saw it and thought gee lets go 180 on this and ban all returns across the board.
  
  What made back then better retail actively black listed consumers that abused the system now theres no abuse because its banned, sorry at the prices they want they can do more for the consumer to protect them from poorly designed games, thats why retail had a premium now the premium is pure profit and not insurance on returns.
  
  
  The trouble with lowering the price out of the first 8 months is that you have lost so much momentum the sales would rot worse at full retail price, the lower it is at launch the more you will sell.
  
  Yes we all know zippy is a idiot thus why the world loves/hates it(?) but there is some logic to this.

  26.11.2007 17:48 #11

• borhan9

  Quote:Not surprisingly, music revenue was down due to declining CD sales.We know this is happening because the music industry is changing and the media format is changing in all ways.

  19.12.2007 18:35 #12