Retailer GameStop held its quarterly earnings call following record revenues in fiscal 2007 of $7.1 billion. Here are the highlights from the call:

On Super Smash Bros. Brawl

Super Smash Bros. Brawl released just after GameStop's fiscal 2007, but the firm has high hopes for the game during 2008.

GameStop CFO David Carlson said, "It should be getting a lot of attention [from the Street]. I would say that it'd most likely be in the top five for the year, if not towards the top of the top five. It's a very significant title, and is selling very well."

On Monday, Nintendo announced that Super Smash Bros. Brawl had sold 1.4 million in its first week on the US market, following its launch on March 9.

COO Dan DeMatteo added, "One thing about Smash Bros. is that it will have a very broad audience, so it won't be as narrow as something like a Grand Theft Auto, potentially, which means it will have a long tail on sales."

2008 price cut forecasts

GameStop execs said that they have no verification of price cuts happening this year, but they do expect notable cuts to occur at some point during 2008.

"We haven't assumed huge amounts of price cuts, but we have assumed a couple," Carlson said. "The PS2 has sold through very, very well at $129. When we did our budget, we assumed that it will be cut to $99. We have no knowledge of that, but we're making the assumption there.

"We're also making the assumption that both the Xbox [360] and the PS3 have about a $50 price cut sometime during the year. Again, we have no knowledge or verification of any of those, but that's just kind of the assumptions we've used...

"We're not assuming any price cut on the Wii or the PSP at this point."

Indefinite double-digit software growth

Fiscal 2007 proved to be a record year for both the US videogame industry as well as GameStop. DeMatteo can see no end to significant annual growth year after year.

He said, "I think the models and the trends of the past are a thing of the past. And now with the broadening of the audience, et cetera, I can't envision any year into the future where we're not going to have double-digit software growth."

Supply/demand of hardware

Supply issues hampered Xbox 360 in January and February, while Wii shortages continue. GameStop believes that the Xbox 360 and PS3 will now both be readily available for consumers, but PSP and Wii supply will remain tight for some time to come.

DeMatteo said, "Most of our supplies have improved. Right now, we're not seeing any problems with the PS3, and we should have a good stock of PS3s in place when Grand Theft Auto IV launches. Same with PS2. With the PSP, we're still anticipating shortages for the next several months.

"With Wii, we've been seeing increased flow, but we still anticipate that it still isn't going to meet demand for potentially the next two quarters. The Nintendo DS, we have received better flow, and increasing allocations, so that's improved.

"The Xbox 360, we have had increased allocations, so that has improved."

He added, "...Summarized, it's getting better. I think most everything will be caught up soon, with the possible exception of the Wii."

When the next next-gen platforms will arrive

If the current generation of hardware follows traditional hardware cycles, we could be seeing a new generation of hardware as soon as 2010. But GameStop said the sheer horsepower of the PS3 and Xbox 360 and the "revolutionary" interface of the Wii could very well extend this cycle longer than ever before.

GameStop CEO R. Richard Fontaine said, "I have no idea [when the next generation of consoles will hit the market]. But what I do believe is that, particularly when you look at some of the new platforms that are out and the huge investment that has been made, you can start with the PlayStation 3, for one, and to some degree a little bit less with the Xbox 360, the horsepower in those units is going to really point to a much longer cycle. The size of the investment is gigantic.

"Therefore, I think if you look at what has happened with the PS2, I don't think it's unreasonable to believe that the PS3 and to some degree maybe the 360 can still be generating growth when we get three, four, five, six years into the cycle.

"Honestly, the Wii is such revolutionary technology...I really don't know [how long it could last]. My guess would be that it wouldn't be so much that we're going to see a new unit, as we're going to see new applications and new accessories for the unit. And that could change the real fundamentals of who the customers are."