Skip to main content

Video games have been good to Best Buy so far in 2017

Gee, were there any high-profile gaming releases in early 2017 ...?

Here's the lesson for retailers in early 2017: If you carried and sold the Nintendo Switch, it helped your bottom line.

Best Buy had a way better first three months of the year than anyone seemed to expect, it announced Tuesday morning. And some of the best-selling products during that first quarter came in video games.

The CEO of Best Buy, Hubert Joly, specifically mentioned a "strong performance in gaming" as one of the reasons the retailer had better comparable sales this year than last.

Joly doesn't name-drop Nintendo, but you could feel safe betting all your Mario Party coins that the insanely popular Switch (which came out in early March) had something to do with that.

Nintendo sold an estimated 2.74 million Switch consoles (and even more copies of the new Zelda, interestingly) worldwide in its first month on the shelves, leading to the company's highest share price since 2010, The Guardian reported.

Best Buy has leaned hard on the Switch. It quickly sold out of preorders, and after the console's release the company would advertise when more shipments were coming in. Target got a swift sales kick from the Switch too, with execs over there earlier this week citing it as one of the reasons for a not-as-bad-as-expected first quarter.

Best Buy also has a paid Gamers Club where people can get access to special discounts on video game items.

Strong Switch sales could continue. Nintendo has been staggering some of the big-name titles. The company held back a Mario Kart until April. Titles like the online shooter Splatoon and a new entry in the Super Mario series are slated to come out, with Call of Dutyrumored – all titles that could compel someone to buy a Switch.

Best Buy's online sales went up, tablet sales were meh

Of course Best Buy sells more than Nintendo Switches.

Joly said the company had better sales in the mobile phone space than it had anticipated. Computing and the "connected home" spaces also did well. High margins in appliances and home theater helped too. (The margin is the difference between how much Best Buy buys an item for, and the price it sells it to the customer for.)

And U.S. online sales shot way up, jumping 22.5 percent compared to last year. Best Buy said that was mainly because more people visited BestBuy.com, and a higher percentage of visitors bought something.

Still, despite that public narrative of "Sales are all going to the web," online revenue only made up 12.9 percent of all Best Buy's domestic sales. Meaning non-online sales are still a huge driver for the retailer.

What hurt Best Buy?

Margins in the gaming and mobile industry aren't great, the retailer said. And tablet sales were also down during this first quarter.

But overall, comparable sales at Best Buy went up 1.6 percent compared to last year (even though the retailer has 12 fewer large stores, and 40 fewer mobile locations after closing them in 2016). Bloomberg said analysts had actually expected those comparable sales to go down.

Next Up

Minneapolis skyline

Climate change in Minnesota is clearly seen at night

A lot of warm days and far fewer chilly nights.

Hennepin County Medical Center, HCMC

Driver, 83, killed in collision with semi-truck in Northfield

The Northfield man died at Hennepin County Medical Center.

Taco Bell

Impatient driver who fatally struck woman outside Taco Bell sentenced

Tammy Renae Olson was sentenced to four years in prison.

bmw-g1a1c50760_1280

Police: Teens 'careen recklessly' in stolen BMW, Mercedes in north metro

They ended up crashing the stolen vehicles, with two arrested and two others on the run.

fire truck

Fire table sparks blaze at Edina home

The fire remains under investigation, but fire officials believe it was accidental.

money hundred dollar bills

Charges: California woman embezzled over $1M from MN employer

Mai Xiong faces several federal charges in the case.

Hsa Law Yaw Say

Shot woman who sparked appeal found injured at Twin Cities hotel

Authorities began searching for Hsa Say early Monday morning.

image

Development may bring changes to Stonebrooke Golf Club in 2023

The popular southwest metro golf course offers scenic views of O'Dowd Lake.

image

Homeowners alert DNR to grouse hunting complaints in Northland

Some hunters are allegedly shooting directly in front of houses.

STPTeensChildTortureRCJ

Charges: Teen couple tortured children while babysitting in St. Paul

A doctor called this "the worst case of abuse he has seen in over 20 years."

Myth

New apartment proposal could spell the end for Myth Live

Myth Live in Maplewood has a spotty past with the surrounding community.

Hsa Law Yaw Say

Police trying to find woman, 18, who was shot at in St. Paul

Police are looking for help finding the woman.

Related

Best Buy landed some 'unicorn'-level rare video game Amiibo

If you know what Amiibo are, you know this is kind of a big deal.

Best Buy goes right at Amazon Prime Day with its own big discounts

Amazon's Prime Day starts Monday and runs through Tuesday – but Best Buy has its own deals lined up.

Best Buy is getting Nintendo NES Classics in

There's no way this leads to any irrational decision-making by people.

Some of the best 2017 Cyber Monday deals from Target, Best Buy, Amazon and Walmart

Some of the highlights being offered by Target, Best Buy, Amazon and Walmart this year.

Prepare to wait in line again: the Super NES Classic is back at Best Buy

Limited quantities will be available in stores this weekend.

Best Buy will pay $3.8M over charge it sold items – after they'd been recalled

Best Buy is paying $3.8 million to settle a charge that it sold about 600 items to customers – even after those items had been recalled.