GameStop Corp. Sales Up 20%; Video Game Software Sales Increase 16%; Comparable Store Sales Increase 6.2%; Second Quarter EPS Grows to $0.14

GameStop sales increased 20.3% to $415.9 million in the secondquarter of 2005, compared with $345.6 million in the prior yearquarter. Video game software sales remained solid, increasing by 16%,with leading titles such as "NCAA Football 2006" from Electronic Arts,"Star Wars Episode III: Revenge of the Sith" from Lucas Arts, and"Pokemon Emerald" from Nintendo of America. The Sony PlayStationPortable (PSP) continued to be an important driver of comparable storesales, which increased 6.2% during the second quarter.

Net earnings for the second quarter increased to $7.9 million,compared with net earnings of $7.7 million in the prior year quarter.Diluted earnings per share increased 7.7%, to $0.14 per diluted share,as compared to $0.13 per diluted share in the prior year quarter. Aspreviously released, second quarter earnings include a $1.1 millionwrite-off of our used "Grand Theft Auto: San Andreas" inventory, dueto a retroactive ratings change from "Mature" to "Adults Only" by theEntertainment Software Ratings Board, and the concomitant pulling ofthe product from sale in our stores.

"We are pleased with our second quarter results," said R. RichardFontaine, Chairman and Chief Executive Officer. "I am particularlyencouraged that we continued to execute our business plan and focus onour customers in light of the very exciting, and potentiallydistracting, announcement regarding our pending merger withElectronics Boutique. Sales grew over 20% during the quarter with theused catalogue showing strength in the face of a relatively slowquarter for new title releases. Hardware sales were very robust andgrew over 40% from the prior year, driven by in-stock positions on allconsole and hand-held platforms. Despite this heavy hardware salesmix, we were able to increase our gross margin percentage throughfreight cost reductions and improved margins on video game software."

Fontaine continued, "In addition, we opened 76 stores in thequarter, with our new stores continuing to perform ahead of ourinternal goals."

Update on Merger with Electronics Boutique

On June 9, 2005, GameStop Corp. and Electronics Boutique HoldingCorp. announced that the waiting period under the Hart-Scott-RodinoImprovements Act had expired. Both companies are now responding toquestions from the Securities and Exchange Commission regarding theirS-4 registration statement and Form 10-K's. The merger is now expectedto close in late September 2005 or early October 2005.

Daniel DeMatteo, Vice-Chairman and Chief Operating Officer, said,"The integration planning process is going well, with integrationteams comprised of members from both companies working on selecting'best practices' and integration timelines. Based on our progress todate, we are confident that the synergies and cost savings previouslyannounced can be achieved."

Guidance for Third Quarter

For the third quarter of fiscal 2005, GameStop expects comparablestore sales to decrease between -8.0% and -10.0%, primarily due to thedifficult comparisons with the prior year quarter when record-breakingtitles such as "Grand Theft Auto: San Andreas" and "Fable" werereleased, with diluted earnings per share between $0.18 and $0.20.Management continues to believe that full year 2005 diluted earningsper share will range from $1.30 to $1.40, without taking intoconsideration the planned merger with Electronics Boutique HoldingsCorp. GameStop will update guidance for the combined company after theclosing of the merger.

Conference Call and Webcast Information

A conference call with GameStop Corp.'s management is scheduledfor August 18, 2005 at 11:00 AM ET to discuss the 2005 second quarterresults. The conference call will be simulcast on the Internet at(http://www.gamestop.com/investor-relations/). The conference callwill be archived on the website until September 1, 2005.

About GameStop Corp.

Headquartered in Grapevine, TX, GameStop Corp. (NYSE:GME)(NYSE:GME.B) is one of the nation's largest video game andentertainment software retailers. The company operates 1,980 retailstores throughout the 50 states, the District of Columbia, PuertoRico, Ireland and the United Kingdom, primarily under the GameStop(R)brand. In addition, the company owns a commerce-enabled Web property,GameStop.com, and Game Informer(R) magazine, a leading video andcomputer game publication.

GameStop Corp. sells the most popular new software, hardware andgame accessories for the PC and next generation video game systemsfrom Sony, Nintendo and Microsoft. In addition, the company sellscomputer and video game magazines and strategy guides, action figures,and other related merchandise to more than 30 million customers.

General information on GameStop Corp. can be obtained via theInternet by visiting the company's corporate Website:http://www.gamestop.com/investor-relations/.

Safe Harbor

This press release (including the attached schedules) contains"forward-looking statements." GameStop Corp. is including thisstatement for the express purpose of availing itself of theprotections of the safe harbor provided by the Private SecuritiesLitigation Reform Act of 1995 with respect to all such forward-lookingstatements. These forward-looking statements are based on currentlyavailable information and represent the beliefs of the management ofthe company. These statements are subject to risks and uncertaintiesthat could cause actual results to differ materially. These risksinclude, but are not limited to, general economic and marketconditions, seasonality, decreased consumer demand for the company'sproducts, possible disruptions in the company's computer or telephonesystems, possible work stoppages or increases in labor costs, possibleincreases in shipping rates or interruptions in shipping service,effects of competition, possible disruptions or delays in the openingof new stores or the inability to obtain suitable sites for newstores, possible disruptions or delays in successfully transferringthe company's headquarters and distribution center to a new facilityduring 2005, higher than anticipated store closing or relocationcosts, higher interest rates, the performance of the company's onlineand other initiatives, the successful completion and integration ofthe planned merger with Electronics Boutique Holding Corp. and otheracquired businesses, unanticipated increases in merchandise oroccupancy costs, unanticipated adverse litigation results or effects,product shortages or delays in the introduction of new generationsystems and related interactive software and other factors which maybe outside of the company's control. Please refer to the company'sreports on file with the SEC for a more detailed discussion of theseand other risks that could cause results to differ materially.
GameStop Corp.
Statements of Operations
(in thousands, except per share data)

13 weeks 13 weeks
ended ended
July 30, 2005 July 31, 2004
--------------- ----------------

Sales $415,930 $345,593
Cost of sales 286,409 238,386
--------------- ----------------

Gross profit 129,521 107,207

Selling, general and administrative
expenses 105,606 85,809
Depreciation and amortization 10,725 8,853
--------------- ----------------

Operating earnings 13,190 12,545

Interest expense (income), net 144 (194)
--------------- ----------------

Earnings before income tax expense 13,046 12,739

Income tax expense 5,143 5,067
--------------- ----------------

Net earnings $7,903 $7,672
=============== ================

Earnings per common share:
Basic $0.15 $0.14
Diluted $0.14 $0.13

Weighted average common shares
outstanding:
Basic 51,646 56,620
Diluted 56,508 59,533

Percentage of sales:
-------------------------------------

Sales 100.0% 100.0%
Cost of sales 68.9% 69.0%
--------------- ----------------

Gross profit 31.1% 31.0%

SG&A expenses 25.4% 24.8%
Depreciation and amortization 2.5% 2.6%
--------------- ----------------

Operating earnings 3.2% 3.6%

Interest expense (income), net 0.1% (0.1)%
--------------- ----------------

Earnings before income tax expense 3.1% 3.7%

Income tax expense 1.2% 1.5%
--------------- ----------------

Net earnings 1.9% 2.2%
=============== ================


GameStop Corp.
Statements of Operations
(in thousands, except per share data)

26 weeks 26 weeks
ended ended
July 30, 2005 July 31, 2004
--------------- ----------------

Sales $890,657 $717,329
Cost of sales 633,756 504,582
--------------- ----------------

Gross profit 256,901 212,747

Selling, general and administrative
expenses 205,864 172,280
Depreciation and amortization 20,990 17,152
--------------- ----------------

Operating earnings 30,047 23,315

Interest expense (income), net 227 (347)
--------------- ----------------

Earnings before income tax expense 29,820 23,662

Income tax expense 11,591 9,312
--------------- ----------------

Net earnings $18,229 $14,350
=============== ================

Earnings per common share:
Basic $0.36 $0.25
Diluted $0.33 $0.24

Weighted average common shares
outstanding:
Basic 51,323 56,805
Diluted 55,499 59,832

Percentage of sales:
-------------------------------------

Sales 100.0% 100.0%
Cost of sales 71.2% 70.3%
--------------- ----------------

Gross profit 28.8% 29.7%

SG&A expenses 23.1% 24.0%
Depreciation and amortization 2.3% 2.4%
--------------- ----------------

Operating earnings 3.4% 3.3%

Interest expense (income), net 0.1% 0.0%
--------------- ----------------

Earnings before income tax expense 3.3% 3.3%

Income tax expense 1.3% 1.3%
--------------- ----------------

Net earnings 2.0% 2.0%
=============== ================


GameStop Corp.
Balance Sheets
(in thousands, except per share data)


July 30, 2005 July 31, 2004
--------------- ----------------
ASSETS:
Current assets:
Cash and cash equivalents $98,954 $159,748
Receivables, net 9,418 6,547
Merchandise inventories 257,396 184,059
Prepaid expenses and other current
assets 24,302 14,628
Prepaid taxes 12,534 11,968
Deferred taxes 5,435 7,661
--------------- ----------------
Total current assets 408,039 384,611
--------------- ----------------

Property and equipment:
Land 2,000 2,000
Leasehold improvements 120,145 84,710
Fixtures and equipment 210,942 154,557
--------------- ----------------
333,087 241,267
Less accumulated depreciation and
amortization 144,353 104,102
--------------- ----------------
Net property and equipment 188,734 137,165
--------------- ----------------

Goodwill, net 320,888 320,888
Other noncurrent assets 3,011 1,698
--------------- ----------------
Total assets $920,672 $844,362
=============== ================


LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Accounts payable $166,070 $130,361
Accrued liabilities 103,706 89,965
Note payable, current portion 12,173 --
--------------- ----------------
Total current liabilities 281,949 220,326
--------------- ----------------
Deferred taxes 19,898 17,629
Note payable, long-term portion 24,347 --
Other long-term liabilities 15,503 6,973
--------------- ----------------
Total long-term liabilities 59,748 24,602
--------------- ----------------
Total liabilities 341,697 244,928
--------------- ----------------

Stockholders' equity:
Preferred stock - authorized 5,000
shares; no shares issued or
outstanding -- --
Class A common stock - $.001 par
value; authorized 300,000 shares;
25,163 and 23,483 shares issued,
respectively 25 23
Class B common stock - $.001 par
value; authorized 100,000 shares;
29,902 and 36,009 shares issued
and outstanding, respectively 30 36
Additional paid-in-capital 519,113 516,813
Accumulated other comprehensive
income (loss) (43) 125
Retained earnings 109,850 132,437
Treasury stock, at cost, 3,263
shares (50,000) (50,000)
--------------- ----------------
Total stockholders' equity 578,975 599,434
--------------- ----------------
Total liabilities and
stockholders' equity $920,672 $844,362
=============== ================


Schedule I
GameStop Corp.
Retail Sales Mix


13 weeks 13 weeks
ended ended
July 30, 2005 July 31, 2004
--------------- ----------------

Video Game Hardware 19% 16%
Video Game Software 65% 65%
Video Game Accessories 10% 14%
PC Software 5% 4%
PC Accessories and Other 1% 1%