GameStop Reports Record Second Quarter 2007 Results

GameStop Reports Record Second Quarter 2007 Results

EPS Exceeds High-End of Guidance by $0.06 per share

Comparable Store Sales Rise 29.1%

New Video Game Software Sales Grow 49%

EPS, Revenue, and Comparable Store Sales Guidance Raised for Fiscal 2007

GameStop Corp. (NYSE:GME), the world’s largest video game and entertainment software retailer, today announced record financial results for the second quarter ended August 4, 2007.

GameStop’s net earnings were $21.8 million for the second quarter of 2007, including debt retirement costs of $2.0 million ($1.3 million, net of tax benefits), a 586% increase over the second quarter of 2006. Diluted earnings per share were $0.13 for the second quarter of 2007, including debt retirement costs of $0.01 per diluted share, exceeding the high-end of previously released guidance by $0.06 per share.

Total sales increased 38.9% to $1,338.2 million in comparison to $963.3 million in the prior year quarter. Comparable store sales increased 29.1% during the second quarter, also beating previously released guidance of 16.0% to 18.0%. During the second quarter, new video game software sales surged 49% and new hardware sales soared 87%. The top selling video games during the quarter were GUITAR HERO II from Activision, NCAA FOOTBALL ’08 by Electronic Arts, MARIO PARTY 8 by Nintendo, Nintendo’s POKEMON DIAMOND and PEARL, and FORZA MOTORSPORT 2 from Microsoft.

R. Richard Fontaine, GameStop’s Chairman and Chief Executive Officer, stated, “GameStop’s outstanding second quarter was fueled by continued consumer demand for all the prevalent hardware platforms and the compelling games released during the quarter. It is apparent that the growing base of gaming consumers is well served by GameStop’s new and used model, our increasing number of convenient locations and outstanding customer service provided by our store ‘gamers’.

“Our second quarter performance was very broad-based, with the U.S., Canada, Australia and Europe all exceeding expectations. New store growth, and more importantly, new store performance worldwide, continues to be impressive. During this quarter, we opened 150 new stores and now operate 4,954 stores in 16 countries. GameStop surpassed the 1,000 store count internationally and we are well on our way to achieving our forecast of opening between 500 and 550 new stores during the year,” concluded Chairman Fontaine.

Daniel DeMatteo, GameStop’s Vice Chairman and Chief Operating Officer, stated, “Looking at this year’s holiday season, the new video game software line-up is exceptional. MADDEN NFL ’08 from Electronic Arts, HALO 3 from Microsoft, ROCK BAND from Electronic Arts, SUPER MARIO GALAXY from Nintendo, GUITAR HERO III by Activision and ASSASSIN’S CREED from Ubisoft, are all part of a diversified group of titles that will appeal to core gamers, casual, young and entry-level players.”

Updated Guidance

For the third quarter of fiscal 2007, GameStop is forecasting comparable store sales to range from +30.0% to +32.0%. Diluted earnings per share are expected to range from $0.19 to $0.21 compared to earnings per share of $0.09 in the third quarter of 2006.

Due to the excellent results in the second quarter, we are raising our full year 2007 diluted earnings per share guidance to range from $1.45 to $1.48. Total revenues are now projected to grow between 20.0% and 22.0%, with expected comparable store sales ranging from +15.0% to +17.0%.

Note that guidance does not include debt retirement costs.

Note that all per share data has been adjusted for the Class B share conversion and the two-for-one stock split that occurred subsequent to February 3, 2007.

Conference Call and Webcast Information

A conference call with GameStop Corp.’s management is scheduled for August 23, 2007 at 11:00 AM ET to discuss the second quarter sales and earnings results. The conference call will be simulcast on the Internet at (http://www.gamestop.com/investor-relations/). The conference call will be archived on the website until September 6, 2007.

About GameStop Corp.

Headquartered in Grapevine, TX, GameStop Corp. is the world’s largest video game and entertainment software retailer. The company operates 4,954 retail stores across the United States and in sixteen countries worldwide. The company also operates two e-commerce sites, GameStop.com and EBgames.com, and publishes Game Informer® magazine, a leading multi-platform video game publication. GameStop Corp. sells new and used video game software, hardware and accessories for next generation video game systems from Sony, Nintendo, and Microsoft. In addition, the company sells PC entertainment software, related accessories and other merchandise. General information on GameStop Corp. can be obtained at the company’s corporate website: http://www.gamestop.com/corporate.