Tony Gikas: On Grand Theft Auto, how were the pre-orders tracking? Were they in line with your expectations or were they a little soft to begin with?

David Carlson: The orders were in line with our expectations, although our expectations were lower than what the markets were because of the low installed base we have both on PS3 and on Xbox 360. Some people think that it would have done as many as the last version and that couldn''t possibly happen with the installed bases we are looking at.

Ben Schachter (UBS): Can you give us some ideas of where you think the real leverage drivers are in the longer term?

David Carlson: I thought of three things that could definitely help us with leverage. In the US as we open more stores, we will be able to leverage both our general office and warehouse facilities as we continue to open stores there.

Internationally, you have two big leverage items. In Europe, as we continue to open stores, we have very immature stores there and we have a plethora of general offices to support those. As we continue to open stores in Europe, we will get the same leverage as we would in the US. In the used business internationally as well, as the used business continues to grow in each of the international countries and catch up with the used business percentage that we see in the U.S., we will get some leverage there as well.

Bill Armstrong (C.L. King & Associates): Can you talk about the PS3 price cuts and the impact on Q2 sales, and what is the impact going forward?

Dan DeMatteo: The PS3 price cut doubled our unit volume sales from the prior sales rate, and the price cut was in July and that doubling has maintained through last week. We have two key driver titles for the PS3 coming out, both are in September: Lair and Heavenly Sword, and both of those are proprietary to the PS3 platform, and we think that is going to help drive sales on that platform.

Bill Armstrong: Could you update us on the name plate conversion going from EB Games to GameStop?

Dan DeMatteo: We''re 75% complete. We believe we will be complete in all allowable stores by the end of the third quarter. There are some malls that may not want us to have two GameStops in the same store, so basically, we are saying we are done except for some stragglers by the end of the third quarter.

Mike Hickey (Janco Partners): Can you comment on how your used game business for next gen is tracking, and do you expect any transitional issues between prior consoles and next-gen consoles as you look to grow that business?

Dan DeMatteo: I can speak to the 360 because it has been out now this is its second year, almost full second year. We do have good supply of used 360 games. PS3 and Wii we have less of because, of course, it is only six or seven months old and people are still playing many of those games. But we are on track for building the used business in the next-gen, as we''ve built businesses in the past.

Mike Hickey: Are you going to maintain your gross margin expectations for the year? I think you''re looking for a decline of 50 to 100 basis points.

David Carlson: We thought that full year gross margin was going to decrease between 75 and 100 basis points. We said that two quarters ago. At this point, I believe with the hardware selling much better than we had anticipated in all of the categories from Xbox to Wii to PS, what we are probably looking at is that our gross margin will decrease between 100 and 125 basis points for the year. That will be picked up by the SG&A leverage, and we probably will end up with an operating margin between 10 and 20 basis points higher than last year.

Mike Hickey: You''ve used your cash to reduce a lot of debt. How do you expect to use your cash moving forward?

David Carlson: We have used a lot of cash this year to pay down debt. In addition, we will be paying down $120 million of the notes on October 1st. We also have a $12 million note we will pay back on October 1st, which will be the use of our cash for this year. Starting next year after Christmas, we will have to start rethinking what exactly we want to do with our excess cash. Obviously, we will want to expand, use it for capital expenditures, potential acquisitions. But after those, we may pay down more debt or we may look at other equity type items, but it is all up for discussion at this point with the board.

Mike Hickey: On the Wii, obviously the demand is outstripping supply since its release. How is the supply flowing into the stores and how is it ramping and how do you expect it to ramp into the holiday period?

Dan DeMatteo: The supply has ramped on a weekly basis week over week throughout the second quarter, mostly ever increasing. In addition, we have been getting a shipment every week, and we ship the products to the stores. I expect it to slow down, and it never does. There is a schedule that we have in front of us, it is a tentative one that was given to us, and we are working through that right now. The Wii is going to be in short supply throughout the year.

David Magee (SunTrust Robinson Humphrey): Given the success of Wii and the PS3 performing better of late, what is your latest thinking regarding the overall installed base growing this year? Do you have any preliminary thoughts as far as next year at this point?

Dan DeMatteo: I don''t think we have changed our thought process on most of the platforms. The Wii number we had given out is 3 million to 3.5 million, obviously is probably low. We said that at the beginning of the call that our Wii and DS numbers that we projected are a little bit under what we are experiencing. But our PS2, PS3 and Xbox projections are in line where we think they are going to end up.

Edward Williams (BMO Capital Markets): Can you just give some color as to how significant Europe was specifically in the quarter, what your comps were like there and what you expect out of the European market as far as the year is concerned? Also, what profitability you are seeing in Europe relative to the company average?