- Some of the best-selling titles for the year are expected to be Super Smash Brothers: Brawl from Nintendo for the Wii; Grand Theft Auto 4 from Take Two for the PS3 and Xbox 360; Gears of War 2 from Microsoft for the Xbox 360.
- Metal Gear Solid 4 from Konami for the PS3; Army of Two for EA, were recently released for the PS3 and the 360; and World of Warcraft from Vivendi for the PC.
- In addition, there are many other great franchise titles releasing or under development, as well as a lot of new original IP, like Prototype and Ghostbusters.

In addition, the refurbishment department is pumping out record numbers of refurbished consoles and games, and this increased volume of trades and higher volume of refurbished goods will drive used business.

- The new branding and marketing campaign, anchored by Power to the Players, resonated well with gamers of all levels, as well as gift givers.
- The firm will increase its marketing initiatives to further establish the brand as the 4,000 U.S. stores will be conveniently located to most consumers.

Fiscal 2008 Outlook:

- Full year sales are expected to increase between 19% and 21%, with comparable store sales increasing between 10% and 12%.
- The U.S. videogame industry will continue to grow at a rapid pace, with a software growth rate of between 15% and 20%.
- Operating margins are expected to improve by 40 basis points to 7.5%, with 10 to 20 basis points coming from gross margin improvements and 10 basis points coming from SG&A leverage.

Depreciation should range from $138 million to $140 million, with net interest expense in the $25 million to $27 million range.

- Diluted earnings per share is expected to range from $2.25 to $2.34, representing an EPS growth of between 25% and 30%.
- For the first quarter, comparable store sales are expected to be between 24% and 25%, with diluted earnings per share ranging from 32 cents to 33 cents.

Key questions and answers from the fourth quarter earnings call conducted by GameStop Corp. on March 18, 2008.

Benjamin Schachter (UBS): How do you think internally of same-store growth?

David W. Carlson: We have always tried to talk about how people need to focus more on software growth than same-store growth. The industry works in such a manner that as the hardware prices come down over time, it puts pressure on the same-store comp number.

As the comp number comes down, typically software grows even faster and used software as well grows faster, and EPS growth will be inverse to your comp growth.

Daniel A. DeMatteo: As new software sales go up, trades go up as people trade in games and use it as currency to buy new video games. Over time these used software sales will approximately match new software sales.

We got into tournaments in our stores. We realized there is an opportunity to do that better and in a bigger way. We have built a prototype store out in the San Jose market. It’s going very well. We have several others slated for this year in other markets and we will continue to refine it as we see how it goes.

David Magee (Suntrust Robinson Humphrey): What have you assumed with the price cuts on the hardware side this year?

David W. Carlson: We have not assumed huge amounts of price cuts but we have assumed a couple. The PS2 is still selling well at $129. When we did our budget, we assumed there will be a cut to $99.

We are also making an assumption that both the Xbox and the PS3 have about a $50 price cut some time during the year, but again we have no knowledge or verification of any of those. We are not assuming any price cut on the Wii or the PSP at this point.

David Magee (Suntrust Robinson Humphrey): That would mean that the dollars would be up for the year on the hardware side?

David W. Carlson: That is definitely the case. The amount of hardware that we are going to sell is going to be more than 2007.

David Magee (Suntrust Robinson Humphrey): Is there anything with digital downloads that would give you pause about the retail models the next several years?

R. Richard Fontaine: There is going to be some application in terms of levels and there is going to be some downloading of very old albeit very good games that use far less memory.

Tony Wible (Citigroup): Could you update us on how penetrated you can be with the U.S. store base and have those targets changed with the gaming trend expanding?

R. Richard Fontaine: Yes, they absolutely have and to some degree, it has changed in direct proportion to the overall growth of the business and the tremendous change in the demographics.

We just had an updated version based upon some new metrics that we are using and our real estate people working with the brokers around the U.S. have come back and feel very comfortable using the current metric that there are additional 1,685 potential locations available yet for the GameStop model.