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GameStop: PlayStation 4 demand to outpace supply at launch

The retailer used its earnings call to offer early indicators of strong interest in the PS4 -- and expressed concern with demand for the Wii U.

The PlayStation 4 controller.
The PlayStation 4 controller.
Sony Computer Entertainment

GameStop reported its earnings yesterday, but perhaps the biggest news came from its earnings call, in which it said that demand for the PlayStation 4 is already showing signs of strength.

According to GameStop President Tony Bartel, "nearly 900,000 members have already signed up for the PlayStation 4 First to Know List." That list provides all of the latest details on the PlayStation 4 to customers and is usually a strong indicator of the number of people who might preorder the device when it goes on sale in the fourth quarter.

Bartel went on to tell investors that at this point, his company is expecting demand for Sony's console to outpace supply.

"Although we have been given no official numbers by Sony," he said, "we do believe that demand will far outpace the supply of this product during the launch window."

Sony made the somewhat surprising decision recently to unveil nearly all of the details surrounding its PlayStation 4 -- except for the actual hardware design. GameStop seems certain that the device will launch in the fourth quarter.

Aside from Sony talk, GameStop dug into its issues with Nintendo's poorly performing Wii U. Bartel said that the Wii U actually had a stronger-than-expected launch, selling out initially, but has proven to be "disappointing" over the last few months. That was made abundantly clear in the last two reports from research firm NPD, which revealed that Wii U sales hit only 57,000 units in January, and as little as 64,000 units in February. Still, GameStop isn't willing to give up on the hardware, and Bartel believes he knows why the device has had some trouble:

One, I still think that there is tremendous opportunity from a consumer standpoint, that they do not understand the tethered tablet, the way that the gameplay worked. I think that the marketing has not broken through the level that it needs to, and in spite of efforts of our team to really talk about that, and educate consumers about that, I think that we still have an education process we need to go through. More importantly, I think where you're really going to see Wii U take off is when there is a strong first-party title, that's what we've always seen. And the fact that we really did launch without a strong first-party title, I think we're seeing the ramifications of that today.

J. Paul Raines, GameStop's CEO, added that he believes "there's lots of opportunity for the [Wii U], still."

GameStop generated $3.56 billion in revenue in the fourth quarter, a slight decline from the $3.58 billion it posted a year earlier The company's net earnings increased, however, to $262.3 million from $239.5 million.