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GameStop Corp. (GME) Chief Executive Daniel DeMatteo played down the potential impact of a new push by Wal-Mart Stores Inc. (WMT) in the videogame business, saying his company can continue to gain market share.
During a conference call with analysts and investors, DeMatteo said Wal-Mart's efforts are "obviously" an effort to boost its share of the first-week of new game titles. GameStop, the largest videogame and entertainment-software retailer by sales, now dominates that market, as it has 60% to 70% of the market share in first-week sales, DeMatteo said.
"We believe our pre-release marketing, exclusive content and the immediate currency provided by our trade-in program will allow us to continue to gain market share as it has for the last few years," he said.
GameStop shares recently rose 0.6% to $21.40 as broader markets fell sharply.
Earlier Thursday, Wal-Mart unveiled a new website for videogames. The site touts exclusive content and special incentives, such as store gift cards, to pre-order new releases, as well as a trade-in program for used games and electronics. Under the trade-in program, customers will receive a prepaid Wal-Mart Visa card in the mail several days after shipping in their old products. GameStop's trade-in program in stores provides instant store credit for purchases.
Also earlier Thursday, GameStop posted a 6.7% increase in first-quarter profit, slightly better than Wall Street's forecasts, as new game sales were stronger than industry trends. GameStop's revenue rose 5.1% to $2.08 billion and included a same-store sales decline of 1.6% as shortages of game systems hurt hardware sales.
Analysts had most recently forecast $2.03 billion in revenue.
-By Mary Ellen Lloyd, Dow Jones Newswires; 704-948-9145; firstname.lastname@example.org