GameStop Thinks Switch Shortage Will Persist, Looks Into Switch Pre-Owned Market

GameStop has just reported a fantastic third quarter mostly due to the sustained momentum of the Nintendo Switch. As they celebrate their growing profits, GameStop Chief Financial Officer, Rob Llyod thinks that the Switch’s shortage will likely persist through the holiday season as the demand greatly outpaces the supply Nintendo is able to provide.

In his statement, Llyod said:

Our expectation is that demand for Switch will continue to outpace supply for the remainder of the holiday season and for this to be one of the most sort after gifts. We are working closely with Nintendo to ensure that we are best able to meet the holiday needs of our customers.

Still, the company is looking into the Switch Pre-owned market being a thing, especially later next year in 2018. Interim CEO, Dan DeMatteo, compared the pre-owned market of competing consoles and hypothesise the pre-owned market for the Switch being a thing not too long in the future and is looking to capitalise on it when it happens.

So, what we see there is actually an interesting dynamic relative to where we were four years ago. So, on the Switch, we would expect that that would be a more meaningful contributor to our preowned business probably in the latter half of 2018, just recognizing that part of that dynamic is that it’s the new console on the block. So, people that are buying the Switch are playing those franchise titles that Nintendo has released Zelda, Mario Kart, Super Mario that keep them engaged with that platform.

In contrast, if you look back four years ago, it did not take as long for the PlayStation 4 and the Xbox One to work their way into our preowned business because you had those two consoles kind of competing with each other. And so, you had that consumer that would try one and decide they wanted to go with the other traded in and sort of switch [indiscernible]. So, the dynamics is just different this time.

You can read the full transcript, which covers all other GameStop businesses here.