Good morning. Welcome to GameStop Corporation's Fourth Quarter 2011 Earnings and 2012 Outlook Call. [Operator Instructions] I would like to remind you that this call is covered by the Safe Harbor disclosure contained in GameStop's public documents, and this is the property of GameStop. It is not for rebroadcast or use by any other party without prior written consent of GameStop. At this time, I would like to turn the call over to Paul Raines, CEO of GameStop Corporation. Please go ahead, sir.

Good morning, and welcome to GameStop's year ending conference call and strategic update. Before we get started, I would like to recognize the thousands of GameStop Micromania, EB Games and Kongregate associates, who continue to provide the best customer service and innovation in 15 countries around the world. Thank you for joining us for what we believe will be an important update to investors with interest in GameStop. We have scheduled a longer call than usual today so that we can spend time discussing our strategy for 2012, as well as our 2011 accomplishments and results. Please be sure to follow along with the slide presentation, which can be found at investor.gamestop.com while you listen to our presentation. I am joined on the call today by Tony Bartel, our President; Rob Lloyd, Executive Vice President and Chief Financial Officer; Mike Mauler, Executive Vice President for International; and Matt Hodges, our Vice President of Investor Relations. Investors who have followed GameStop know that we launched a strategic review of the company in 2009 and have been executing against that plan during the last 3 years. We are pleased to share with you today the progress we made in 2011, and more importantly, how we will continue to innovate and transform GameStop in 2012 as a hybrid retailer of physical and digital products in the gaming and mobile space. During early April of last year, we shared with you at our Investor Day a very clear and well-thought-out strategy. That strategy started with maximizing our brick-and-mortar stores. During 2011, we continued to leverage the store footprint to drive sales of physical console gaming products and added a $323 million digital console business or DLC sold at retail. We reduced our store footprint by 1% in the U.S. for the last 2 years…

Thank you, Paul. Good morning, everyone. I'd like to start by briefly recapping our fourth quarter and fiscal 2011 year end results, then I'll provide our outlook for the first quarter and fiscal 2012. In the fourth quarter, total global sales decreased 3% from the fourth quarter 2010 to $3.58 billion, primarily due to the weakness in Wii hardware and the overlap of the Kinect launch. Comparable store sales for the quarter were down 3.6%. Earnings per share were $1.73, excluding impairment and restructuring charges, which I'll cover in a minute. For the full year, sales increased slightly over 2010 to $9.55 billion, primarily due to growth in software and preowned, which overcame the weakness in hardware. Comparable store sales for the year were down 2.1%, with U.S. comps down 1.2% and international comps down 4%. Earnings per share grew 7% over last year to $2.87, excluding the impairment and restructuring charges. The earnings per share of $2.87 was 98% of our EPS target for performance-based compensation granted in February 2011. 98% achievement yields a 95% payout. As a result, you will see Form 4s filed in the next couple of days for our named executive officers for the forfeiture of 5% of the performance shares that were granted. Gross margins improved by 190 basis points for the fourth quarter and 130 basis points for the full year. Our sales mix shifted from hardware to preowned and new software, and the margin in the other category improved as our Digital business and PowerUp Pro membership grew. During the fourth quarter, we recorded charges totaling $81.2 million for asset impairments and the cost of exiting certain markets and non-core businesses. The largest impairment charge of $37.8 million, related to the Micromania tradename, as sales have not met the initial forecast used…

Thanks, Rob. Good morning, everyone. Overall, international results met expectations in 2011. Despite industry declines and poor macroeconomic conditions, our European operations had a solid year, generating operating income of $70.6 million with 3.5% earnings growth over the prior year, excluding charges. A strong focus on cost control and higher gross margins drove this improvement in operating earnings, with our French and Italian businesses leading the field with operating margins of 7.2% and 6.7%, respectively, among the best in the world. As communicated during Investor Day, implementing best practices across our territories resulted in significant improvements in a number of areas. We realized strong growth in European preowned sales and margin, which exceeded the U.S. Our loyalty program, founded in France, was rolled out to Australia, New Zealand and Spain. And during the year, we leveraged the technology investments and processes developed in the U.S. to drive strong growth in our console and PC digital businesses. 12 months ago, we committed to expanding our e-commerce capabilities. Since then, we have made significant investments in technology which has helped us to achieve a 36% increase in sales versus prior year. One of the primary drivers of margin growth for the international markets was the expansion of our private label accessory business. By leveraging our global footprint with our manufacturers, high-margin, private label accessory sales grew 37% versus prior year. Finally, strong progress was made during 2011 and leveraging our global purchasing power to provide unique and exclusive content to our customers worldwide. Along with exclusive content on key titles such as the Adam's edition of Assassin's Creed and the Battlefield 3 Physical Warfare pack, we also coordinated with the console manufacturers to launch an exclusive White PlayStation 3 and a Call of Duty-branded Xbox 360 in Europe. 2011 was a year…

Thank you, Mike. As Paul shared with you earlier, the investments made in the digital space are working, and we are ahead of our digital growth forecast of 57% digital growth in 2011. We prudently invested in building blocks for the future that are growing quickly, and we avoided the allure of highly-priced technology companies. In short, we believe that we are leading our customers into the hybrid experience that enhances their enjoyment of gaming. Our growth projections for the global digital business remain at a healthy 13% CAGR through 2014, led by strong growth in downloadable content and mobile gaming. As I'll discuss later, we have invested or are investing in each digital growth area to apply our unique strength to provide consumers with a strong and compelling proposition. As we look at our progress towards our goal of $1.5 billion of digital receipts by 2014, we are ahead of schedule as our $453 million of digital receipts represented 57% growth over last year. This year, we expect our digital business to grow 50%, keeping us on pace to reach our $1.5 billion goal. As Rob shared earlier, we expect that our digital revenue will be accretive to our gross margins on a GAAP basis and will be similar to our overall margin on a non-GAAP basis. Let me detail the actions that GameStop has taken to drive growth in each digital category. In DLC, we are very confident that we are introducing and enabling new customers to enter the exciting world of expanded content. Based on the survey of customers about DLC in our stores, we found that 1/2 of them had never purchased DLC before. And when we asked them about their intent to purchase again at GameStop, 91% of these customers said that they intended to…

Thanks, Tony. At GameStop, we frequently get customer requests for adding products to our buy-sell-trade program. Given the frequency with which consumers upgrade their mobile devices and their use of mobile devices as gaming platforms, we saw an opportunity to add them to our buy-sell-trade model. During 2011, we launched trades and sales of iDevices and new tablets in a test group of stores. Customers reacted favorably to those tests, and we are announcing today the creation of a mobile business unit within GameStop to support this initiative. That mobile category in GameStop is comprised of 3 primary segments. The first is recommerce or a buy-sell-trade of mobile devices and electronics, the second is gaming-oriented tablets and the third is related services for those devices. In order to better understand our rationale for entering this category, we will share some of the work we have done to build our market model. The fast-growing recommerce category is currently composed of a highly fragmented group of players with little or no national branding or store footprint. Most of the industry today operates as websites, peer-to-peer marketplaces or white-label services inside big-box retailers. The largest product groups in the market are mobile phones, MP3 players and tablets. Most players in this space have little or no refurbishment capacity, while GameStop has a high-tech 200,000 square foot refurbishment facility with significant technical capabilities. At the same time, GameStop stores have developed the most effective trade process in the industry, last year handling 120 million customer trade transactions. We also have studied the amount of new consumer electronic devices that are shipped every year, and we estimate that over 200 million devices were shipped in 2011 in the mobile phone, MP3 player and tablet categories. Only this week, the new iPad was announced to have…

Thanks again, Paul. Now I'd like to cover guidance for 2012. Let me start by saying that for the video game market in the U.S. in 2012, we believe that hardware will decline between 5% and 10% due to the age of the consoles. We expect that software will also be down mid-single digits for the year. While not available in any market estimates, we see mid-single-digit growth in the preowned business and of course, we have a 50% growth target for digital receipts and a sizable goal, which you've just heard from Paul, for our mobile business. As we disclosed in the press release, we expect our revenues to decline between 7.5% and 9.5% in the first quarter and comp sales to decline 7.5% to 9%. As we face tough comparisons to the 3DS launch a year ago and to the title release slate, which included Pokémon and several other strong titles a year ago, we expect earnings per share to be between $0.52 and $0.55 using weighted average shares outstanding of 135.4 million based on share buybacks done to date. For the full year, we expect revenue to grow between 1% and 5% and comps to range from negative 1.5% to plus 2%. We expect gross margins to continue to increase in 2012 due to the growth of preowned, digital and our mobile business despite the launch of the Wii U in the fall. We expect our operating margins to return to in excess of 7% as we continue to find efficiencies in our business and are controlling our spend on technology and initiatives. We expect net income to grow between 4% and 10%. We expect earnings per share to range from $3.10 to $3.30, an increase ranging from 8% to 15% using weighted average shares outstanding of…

Thanks, Rob. In conclusion, our strategy includes the following 6 planks, which have been consistently driven over the last year and now include the addition of our mobile business. GameStop is a company whose history and DNA is filled with change. We have been engaged in a calculated transformation of the company, building on our brick-and-mortar strengths with digital and mobile assets. We are doing what we said we would do and executing along the lines of a strategic plan first built in 2009. Our primary assets continue to be the same ones that have produced our successful company, deep customer relationships built over time with excellence in customer service, a sharp focus on gaming and everything that means in terms of assortment and innovation, and lastly, a competency around buy-sell-trade and how that knowledge can be used to bring unrivaled value to delight customers. It is clear to us that our internal rate of change has been greater than the environment around us. And we have invested to intentionally become a company that is very different from any of our competitors in the world. Through the implementation of PowerUp Rewards, digital gaming, mobile businesses and a rationalized store footprint, we will accelerate leverage gained from our investments. Our reduced capital expenditures, flattening SG&A plan and expanding operating margin are signals of improving profitability. GameStop is a company that is building value for the long term. And with that, we will open up the meeting for questions.

[Operator Instructions] We'll take our first question from Gary Balter with Crédit Suisse. Gary Balter - Crédit Suisse AG, Research Division: It's refreshing to hear a company that's taking advantage of the opportunities facing them. So Paul, congratulations on everything you're doing first of all, and what you're doing on the -- I'm going to go -- I'm going to stay away from the digital because I know you're going to get a lot of questions on that. So I'm going to go back to the boring stuff like video, hardware and software. Obviously, you talked about Q1 being a challenge because of the comparisons. As you think about your confidence of getting the comps back to the guidance that you gave for the full year, what are the assumptions built into what you're thinking about for new hardware and new software? And I'm assuming you're accepting that there's not going to be a new platform this year because it looks like that's 2013.

Gary, thank you. Let me start that off and then I'll let Rob give you his assumptions that he put in the model. But I think we all know that there's a lot of unknowns around the console business right now. I mean, we read and hear all the rumors and everything that you guys read. We don't really have a lot more information than that. But we have tried to be clear eyed about this, and if you look at our plan, we really aren't expecting big growth in console or hardware this year. We're anticipating a year with some unknowns around the end of the cycle here. So what I'm pleased about, I think the team is pleased about is we've got lots of other growth initiatives. But Rob, maybe you want to talk about what your assumptions were on the model.

Sure. Gary, we wanted to be realistic about where we are in the cycle and where we see hardware and software in the market. But we also wanted to recognize that within our internal estimates, we anticipate that we can continue to gain share as we have in the past. So we spoke about hardware for the market being down 5% to 10%. We expect that we can gain some share. In software, we said mid-single digits decline. And we have certainly demonstrated strength at gaining share on the software side. So in terms of our comp guidance overall, I think that you see that it's share gains and the drivers of our digital business and the mobile business, which Paul spoke about that we're counting on for the future. Gary Balter - Crédit Suisse AG, Research Division: The question we get, so I'll ask you is, there's talk about the next platform coming out with flash drive instead of disk. How do you think about that and the impact that, that would have on your business?

A couple of things there, Gary. And I'll let Tony Bartel talk a little bit about our strength. We don't use the NPD metric a lot because we see that a little bit as an old economy metric. But if we do look at it, we are very dominant in the next gen software sales. So number one, I think we all have to understand GameStop has a very large business with our partners in the console business that changing that model is a large business put at risk. However, we like our process for selling digital businesses. We like what we've done with DLC. And candidly, the PC download business is growing well. So we think our ability to acquire customers and sell them digital content is really being well proven. But Tony, maybe you want to talk a little bit about that.

To that point, Gary, what we see is that we have an extremely dominant market share. Our highest market share of any product that we sell is on the 2 high definition platforms, Xbox 360 and PS3. So there's a very dominant market share that we have there, and that also happens to be our fastest growing, that's the place where our market share is growing fastest. So couple that with our impact on the launches, many of our presell opportunities, PowerUp Rewards, the presell DLC, all of those things are playing in to give us a ever-growing share of the marketplace of an already dominant market share. So we really see this as something that we will partner with both Microsoft and with Sony on as we see these rumors mature. And we'll continue to drive the business and drive our market share further.

We've sort of taken the view that whatever the form factor, we can be successful because of the deep relationships we have with those 17 million. Because Rob, you wanted to update your comment.

Yes, Gary. This is Rob. I did fail to mention in answering your first question that growing our used business mid-single digits is also a component of our comp estimates year-over-year. Gary Balter - Crédit Suisse AG, Research Division: Yes, I assumed that.

We'll take our next question from David Magee with SunTrust Robinson Humphrey.

A couple of questions. One is the -- how confident are you regarding the packaged goods business this year? I think I heard you say down 5%. Is there a chance you'd be down more than that? And if so, what would be -- what can cause that?

Want to take that, Rob?

Well, yes, David, we said down 5% to 10% we think for the market on hardware and down mid-single digits on software. So that mid-single digits implies some range on the software side. We see that the market, consoles are aging and that affects the consumer demand.

David, there is a strong title lineup, right, Tony? You've got...

Absolutely. I mean, you've got FIFA, obviously, and Madden. Then you've got NCAA, Halo 4 coming out. You got another Call of Duty offering coming out, as well as Assassin's Creed. So there's a lot. Resident Evil out there. So there's a -- we see a very strong title lineup that is out there. And so, we're very bullish especially on the back half of the year that -- on the title lineup.

David, we're not sitting here gloomy about console at all. I mean, we see some hot titles. We know that our strategy works around gaining share. We also like launching DLC. I mean, our team is having meetings almost every day with publishers creating hot DLC launches that come along with new titles. So while there's some unknowns, we think that there's some real strengths in that console business.

And just one quick second question, on the Spawn business, how widespread do you think that could be? You mentioned it was successful so far. Is that something that potentially is very big or is it just sort of a niche business for the future?

One thing we got to do right now is focus on the technology and wouldn't want to speculate. We, obviously, think it's a very interesting technology. But Tony, maybe you want to talk about where we're at?

Sure. Just to give a little more detail on Spawn, we have successfully evolved what we purchased from Spawn, from a peer-to-peer cloud architecture into this fully featured -- it's a highly scalable data center optimized cloud gaming service. So it's a full cloud service, and we have gone through that evolution. Currently, it’s deployed like I talked about earlier in 6 data centers which cover the entire U.S., and we have a lot of people playing it, and so it's a very well-tested system at this point. Also as you know, I believe, that we come at it from a very unique perspective, which the publishers really appreciate, in that we don't require them to change anything on their games. It's a patented virtualization technology that we bought, and it makes it very easy for them to bring their games to our platform. So the results so far have given us a really high degree of confidence that we have the right technology to attack the market that's presented by cloud gaming. And we're going to continue to work with our publishing partners, and we remain right on the development schedule that we shared with you last year.

We'll go next to Colin Sebastian with RW Baird. Gregor Schauer - Robert W. Baird & Co. Incorporated, Research Division: This is Gregor Schauer filling in for Colin who’s traveling at the moment. We’d just like to get a little bit more insight, if possible, into what some of the key titles are that you're expecting to generate the bulk of the revenue this year. And then, if you have any comments on Grand Theft Auto and whether that's factored into your guidance at all?

Go ahead, Tony.

Sure. I'll repeat that list. We look at -- Ghost Recon, we think it’s going to be strong. FIFA, NCAA, Madden, Borderlands, Halo 4, Assassin's Creed 3, another Just Dance title most likely, Call of Duty, Resident Evil 6. Those are all the titles right now. And Max Payne 3 also is going to be a big title that we have coming out. Prototype soon to come out. So those are the titles that we are banking on. In terms of GTA V, there's a -- we don't have solid information that we can share at this point around that. So we have not put that into our forecast. Gregor Schauer - Robert W. Baird & Co. Incorporated, Research Division: Okay, and presuming if it were it would -- you guys wouldn't -- would have a significantly higher estimate this year?

We would adjust our estimate if we had knowledge that GTA was...

It's highly likely we would have the leading share on it globally, Greg. So yes, it is. It's highly likely we would add if there is.

We'll go next to Tony Wible with Janney.

I had 2 questions. One is, I was hoping you could give us a little insight on the streaming platform and how exactly you plan to roll that out? Will the pricing be subscription or à la carte? And will you kind of phase roll it out or roll it out nationally? And the second question I had is, if you could address some of the speculation about the next gen Xbox potentially blocking you and just your general views about that and what that means for either the platform or for yourself?

Tony, good morning. I'll let Tony talk a little about the national footprint. We really -- we got a -- as you know, a lot of competitors watch us pretty closely these days. So we got to be careful about what we discuss for competitive reasons. I will just say that -- and Tony will tell you a little bit about where it stands, but we're trying to focus on what the technology is and really be guarded about what the plan is. Tony, do you want to talk about the national footprint?

Yes. As I shared, we have 6 data centers. They cover the entire U.S. So we right now are -- literally have gamers all throughout the U.S. that are GameStop associates that are playing this. So we know that the technology works. So we have a full national platform and everything is tied together. True, like I talked about it, it is a data center optimized legitimate cloud gaming service definitely.

And as far as the next gen console, the thing I would say, and I'll let Tony add to it because he's talking to publishers every day. We think it's unlikely that there would be that next gen console because the model simply hasn't been proven it works. Remember that used video games have a residual value. Remember that GameStop generates $1.2 billion of trade credits around the world with our used game model. So consider that taking used games out of that, you'd have to find new ways to sell the games. And our partners, our good partners at the console companies have great relationships with us. Tony, you want to comment?

Sure. And I think it's always important to remember as Paul pointed out, we generated $1.2 billion of credits, the large majority of which went right back into purchasing a video game. Same thing -- we're seeing the same exact thing as we now take in iDevices as Paul shared with earlier. So we are generating a large amount of products through our buy-sell and trade process to make the games more affordable. So as I shared earlier, we have a very dominant market position. Our highest market position of all is with Microsoft, Xbox 360 software. And so we have a very good partnership with them. Like Paul said, we talk with them nearly every day, and we'll continue to work with them. But at this point, we really feel like we have a very good partnership that we will continue to utilize.

It's also interesting to me, Tony, that this is the kind of news that gets out in the industry and it just gets people really worked up and hyperventilating and excited. We see today, GameStop's a very different company than we were 3 years ago. We look at different form factors of gaming today. And I just, the Sony guys were kind enough to send us some betas, and I'm in the middle -- I'm about, I don't know, 4 or 5 hours into Golden Abyss, Uncharted. And I look at that, there is a new form factor with new types of games. It includes some DLC. It really was an almost hybrid launch and we're dominating that. So...

And I think what we shared about DLC is a good proxy for this. That's obviously something that does not have a trade-in component per se with it. And yet we are significantly expanding that business by introducing people to DLC through our associates that they have no knowledge of before they walked into our stores.

Yes, one last note I would add, and this is something we try to educate publishers a lot on and that is that the preowned business is not a cannibalistic business. I mean, I think if you followed the popular conventional wisdom, you would think that preowned is replacing new. The truth is preowned is an opening price point category. The average price is $18. A lot of it is old generation. What it is, it's a category for the customer who's maybe not ready to invest in a new game, but wants to get into the console business and the console entertainment. And what we've done is we've created a way for that new leading edge consumer to dispose of their old games. And that's what creates this great Circle of Life that we talk about that so many try to imitate. So anyway, long answer to I think your question, Tony, but that's how we see it.

Well said, and I couldn't agree more on all the points. Going back real quickly to Spawn, it would be a good problem to have, but if theoretically 10 million people try to jump on that platform overnight, is the platform scalable enough to handle that much volume? Because I just looked at the PowerUp Rewards and then I'm just shocked at how fast that thing has grown. It's far exceeded what I thought it could be and certainly when you kind of think about Netflix and it took over a decade to hit some of these benchmarks. Could you guys scale a platform to see a massive amount of people moving to it in a quick period?

I don't think we're prepared at this point to address the scalability.

I don't think we have that problem.

Yes, that would be a nice problem to have.

I hope we have that problem.

But it's a highly scalable system, but I'm not going to speculate on how much.

Got you.

What you are right about, Tony, is PowerUp, remember that PowerUp has exceeded everybody's expectations including our own. We sat -- we're here in the boardroom at GameStop and we -- and you've been here, we sat around this table with some forecasts that were significant less members than what we have today. So we know that GameStop, the passion customers have around gaming and the relationships they have with their game advisor, there's a lot there. We've really found a way to serve their needs with PowerUp, and it is a customer acquisition platform for digital content.

And you are right that given the fact that it is an acquisition platform, you are right in assuming that there is -- whatever program we launch, especially digitally, we'll be able to leverage it through PowerUp Rewards.

Yes.

It certainly is going to be an interesting next year.

They've all kind of been interesting, Tony. I hope this one is, too.

We'll take our next question from Arvind Bhatia with Sterne Agee. Arvind Bhatia - Sterne Agee & Leach Inc., Research Division: I had a couple of questions going back to your iDevice business. I think, Rob, you mentioned that 30% gross margin number or maybe, Paul, you did. I was wondering what sort of costs are there below that, and what sort of unit contribution fully loaded should we be thinking of? And then in your $500 million to $600 million, I think a couple of years out, revenue projection, are you assuming that the trend continues where a majority of the trade-ins are converted into people using that for buying games and other things? Or are you assuming that mix changes?

Let me let Rob answer your cost question. The only point I would make, Arvind, to start this off though is, remember that why are we in this re-commerce mobile electronics business? We're in this business because as we saw trades coming in, we noticed that this business was uniquely almost tailor-made for our buy-sell-trade skill set. I've often drawn on white boards with you guys that we have a vertical competency around gaming. That's been clearly established for a long time. But as we looked at the business, it's also clear that we have a horizontal competency around buy-sell-trade. And customers kept bringing us in, these phones and tablets and iPods wanting to trade them, and we kept turning them down. So when you think about cost, and we'll see what Rob is willing to share with you on that because it's early. We have a refurbishment center that employs close to 1,700 people. It's 200,000 square feet. A lot of this fits right in, and when you go to our store and trade your iPhone, that transaction is the most efficient trade transaction anywhere, and that's because we've been at this a long time, and we’ve plugged it right in. Rob, do you want to share anything on the other parts of Arvind's question?

Sure. Paul talked about the 30% margin. Most of the costs associated with the, certainly the re-commerce side of the business are in that refurb category. One of the things -- so they're there. Our refurb cost are in gross margins. So they're in that 30%. But one of the things that you should consider with respect to that is that unlike our preowned business, every iDevice goes through our refurb facility. It's about 15% of the preowned video game product that go to our refurb facility. So there are costs in there, and that's a component of what gets us to the 30% overall margin we're looking for there. Beyond that, the mobile business works through the store base just like new software, new hardware and preowned. So the cost structure below the 30% is very similar. Arvind Bhatia - Sterne Agee & Leach Inc., Research Division: Got you. And then one unrelated question on the bankruptcy of one of your European competitors recently. Just wondering if that's having any impact on the marketplace there and how you guys are handling that?

Yes, Arvind, we read the papers and everything like everyone else. And we really don't care to comment on what's going on in that situation, and I would say that we've very focused on our game plan, and we're executing the plan that Mike Mauler shared with you during the remarks. So... Arvind Bhatia - Sterne Agee & Leach Inc., Research Division: I was just wondering if you’re creating any opportunities, particularly in France with Micromania, if there are new opportunities that you see there?

I would say that, we would stay away from saying anything about that. But I will ask Mike maybe to share with you what some of the things. I mean, if you look at operating margins in France, Mike's got a pretty good story there. Mike, do you want to talk about what you've done there to execute?

Yes. Sure. I wouldn't want to comment on what GAME has or hasn't done. We're watching the situation. We're really focused on managing our businesses. We've got a talented team of managing directors and they have strong teams. And we’ve really focused over the last 2 years in 3 main areas, primarily and most importantly a strong focus on tactics, the blocking and tackling of managing our business. So managing the inventory well, staying true to our buy-sell-trade model, a lot of effort in store training and providing outstanding customer service. Secondly, we've moved very quickly to stay ahead of the curve in terms of restructuring in underperforming markets, exiting Portugal, consolidating Northern Europe to make sure our costs are under control as the industry changes. And finally, building a strong foundation really allows us to execute our strategic initiatives. So we're growing our digital businesses. We've rolled out POSA. We've rolled out DLC. And with the loyalty we've taken, the learnings in the United States, in France, and for example, we rolled out loyalty less than 6 months ago in Australia and already by last week, we had 1,000 members per store. So what we're learning in the U.S., we're rolling these best practices out. And finally, partnering with the publishers in all markets for go-big exclusives on new releases where we've taken significant market share on new releases. And so I think you can see the results of us staying focused on our business. You can see the results in our year-over-year performance.

We'll take our next question from Brian Karimzad with Goldman Sachs.

A question first on the used business. Can you give us some hints on what you're baking in for the first quarter given some of the trends we saw in the fourth? And then as you look at the full year, the mid-single-digit growth you're expecting there, it's a little bit at odds in some ways with the expectation of a decelerating new software market. I know there's not a perfect relationship, but if the intuition is that people who are new to the category start with used, it seems that as we're getting aging on the console cycle that perhaps you'll have fewer folks who are new to the category taking a look. And the second question is on the iDevices, can you give a sense of the range of outcomes in there that are in the low versus high end of the guidance you've given. Is it simply the $150 million contribution at the low end and $200 million at the high?

I'll let Rob talk to you about both of those. The only thing I would say, Brian, is be cautious on old assumptions around used. GameStop came in, in January of last year. Remember that in 2010, what do we do, we had 1% growth. We had a very difficult challenging year. We came in and reinvented the preowned business. We changed our leadership there. We brought in some added resources to it. We put PowerUp integrated deeply. So I think your old assumptions around inventory and all that, those are interesting assumptions, but there's a lot of new things going on in preowned to separate it from the trajectory of new. Rob, I don't know what you care to share about the modeling?

Yes. I'm not sure I want to give much color on what we expect from used in the first quarter since I didn't point that earlier specifically. But I will say that I did want to clarify on the mobile business, you had said $150 million in contribution. We're looking for $150 million to $200 million in revenue on the mobile business this year. And I think that's the range that you can operate with.

Okay. So the low end of the guidance kind of implies $150 million and the high end of $200 million? Or is the high end of guidance kind of aspirational for something more?

I think that's fair to say.

We'll take our next question from Mike Olson with Piper Jaffray.

Just wondering if you could give us an update on kind of general sell-through of AAA titles today. I guess the direct question is, are those titles, are tails getting skinnier? And we saw kind of a front-end loaded holiday, and I'd just be interested in your thoughts on why industry sales a week or 2 out are falling versus prior years for some of those titles?

Tony, maybe you want to talk about the titles?

Sure. I would say that generally what we're seeing on the AAA titles are they're meeting our expectations at this point. Clearly, we have a good forecasting system given our reservation process, which is best in class. The other thing that's happening to really extend these titles is the downloadable content is extending these titles and making them bigger at launch. And especially, as we are evangelizing with our publishing partners, what Elite [ph] showed us is, when you have some really compelling content or an expectation of compelling content that you can sell at the time of launch, it's an amazingly powerful combination. And so, what we are seeing is that DLC is actually expanding the tail a bit. And so we're seeing those AAA games. They're doing very well at launch. Of course, our launch share continues to go up dramatically, somewhat because of the DLC. And then we are seeing those extended as new pieces of DLC come out also, we see a resurgence of those games. So kind of what you're seeing is, the tail will drop off a bit, you'll have DLC packs come out. It will increase and then both from a new and a preowned standpoint. And so we really like what DLC is doing to the marketplace right now.

Thanks for the update on the PowerUp Rewards number is 17 million. I'm not sure if you gave a target for the future. But would you be willing to give any thoughts on where you think this could be a year from now based on the trajectory that you've seen recently?

I think we gave a target on where we'd be at in your remarks, right, Rob?

I gave a target on percentage of sales that are made up by PowerUp members. But we did not give a target on membership numbers.

Okay. I think you can expect that if you go back and look at last year's growth, we're pretty happy with the growth rate. And we're going to continue focusing on driving membership.

We'll go next to Bill Armstrong with CL King & Associates. William R. Armstrong - CL King & Associates, Inc.: In France, sounds like business is going pretty well. I'm wondering then why you needed to take the impairment charge for Micromania?

Sure. Rob?

We bought Micromania in 2008, which was obviously the peak of the video game business. The way that you value a trade name is you look at projections of future sales rates and then essentially in the methodology that we used under the accounting rules, you apply a royalty rate. Estimates of future sales in video games in 2008 were obviously higher than estimates are today. So every year when we evaluate that trade name for impairment, we consider what those future estimates look like. And at this point in time, with the aging of the consoles and where the market went in 2011, and frankly, what we see in 2012 for the physical goods market, we needed to adjust our revenue assumptions. And as a result, we got that $38 million impairment. William R. Armstrong - CL King & Associates, Inc.: Okay, I got it. And on the digital sales outlook for this year, in one of your slides, that's projecting $675 million. And I thought I heard Paul say $800 million in his opening comments, did I get that right? And if so, what's the difference?

Yes, what I was talking about was the new categories that we brought in which is digital and re-commerce that we estimated that we would have new businesses that would generate that amount of revenue. But Tony, you want to talk about the digital piece of that?

Well, sure. We anticipate that we'll have another 50% growth. We told you that we would do that. We're right on track in 2011. We have plans in place that I outlined to get an additional 50% growth. So that combined number that Paul gave you was the digital business that we see plus the mobile business that he articulated kind of added on top of that. William R. Armstrong - CL King & Associates, Inc.: Got it. Okay. And finally just another point of clarification then, mobile devices are about 7% of trades, are we talking about 7% of units or 7% of dollars?

Dollars. Yes, you remember we used that metric at holiday, Bill, and gave you a number that was 4%, and what we're pointing out is that year-to-date, that number is now 7%. William R. Armstrong - CL King & Associates, Inc.: Okay, and that's dollars, okay.

Dollars.

We'll take our next question from Mike Hickey with National Alliance Security.

It looks like the beginning of 2012 has been weak across the board in terms of kind of traditional product. Do you kind of see that the -- when you look at the ratio of your holiday sales to total quarter sales, this is the highest that I can remember going many years back. And then it's certainly reflected in your guidance for the first quarter. Can you help us understand if there's somewhere, like in the year that you've seen an inflection point, where you can start to drive growth, whether it's -- seemingly it would be Q4 where you kind of get on track for your growth for the year and whether that's product specific or hardware? And then can you help us bridge between 2012 and your longer-term outlook on 2014 because seemingly, Microsoft came out and said they're not going to announce anything on an Xbox this year at E3. So seemingly that would put it at 2014. And traditionally, when you look at tie ratios for software and so forth into new console change, they show weakness, of course. I would expect hardware to decline, too. So I just have trouble understanding how you get growth, how you bridge that growth divide from 2012 to 2014 given the kind of market considerations I just talked about.

Rob, you want to take that?

Sure. I think Mike, in terms of 2012, you're asking about when quarterly we might start to see growth. I think the challenge for us in 2012 is in the first quarter with the overlaps. We expect that the remaining 3 quarters will show growth in profitability. As we look ahead, candidly, we've made some assumptions about a hardware launch that will come in 2014 and that is a component of the revenue driver for that period of time. That and our continued growth in the preowned part of our business, our digital revenues and the mobile business that Paul has spoken about.

We'll go next to Edward Williams from BMO Capital Markets.

Just a couple of quick questions. First of all, looking at Impulse. Can you talk a little bit about what the market share is like there? And how specifically with Impulse, how you see that kind of evolving this year, both in the U.S. and internationally?

Sure. Tony?

Sure. We don't provide market share information on that. So let me share with you our second part, as we shared, we do anticipate that, that will triple. A couple of things that are going to drive that are, we are integrating that more closely into our stores. And now you can walk into any of our stores in the U.S., and we will also be rolling that out in select international markets later in the year. But as I noted, we will be having a launch in our stores in April, where you can walk in and again, use all of those noncredit type of items to purchase this content directly in our stores and on receipt. So we expect that to be a huge driver, couple that with PowerUp Rewards, the ability to put additional forms of currency in it, and then we have international expansion. So we should see a tripling of that business this year.

Okay. And then as we look towards your 2014 targets and looking at digital, can you characterize how significant DLC is to that total number versus the other digital drivers?

As we shared when we talked about digital, we really see that as -- our market model sees that as a fast-growing category overall when you look at the global picture. We think that us getting into and having the high market shares that I articulated earlier on a couple of launches, we actually think we're bringing a quicker maturation to this process. So we've actually taken our market models and evolved them somewhat and put a greater emphasis on DLC than we had a year ago just simply looking at the success that we've had in the marketplace. And quite honestly as we've brought new customers into the marketplace, we actually see it accelerating faster than what our market model had assumed.

The thing I think that's new about DLC, Ed, is that we've turned this like many things we do, we've changed it into a launch business. If you look at Mass Effect, our good friends at EA have a nice hit with Mass Effect, and then our attach rate that Tony mentioned on the DLC was very high. That only happens because GameStop is in there developing with publishers their great content saying, "Hey, let's merchandise it at launch as part of the launch process." So that's sort of the change that's going on in addition to all the other things that we bring.

Okay, and then, Rob, can you comment a little bit about some other assumptions? What should we be thinking about for gross margins for the other category as the year progresses or looking at the current fiscal year versus the one that just ended? And then also what are your thoughts with regards to hardware pricing?

Let me start with the other category gross margin. We see that, that will continue to improve. One of the reasons for that is because we will continue to grow our digital revenues and those are obviously at a higher margin rate than the overall category. The other being that with the expectation that console -- that hardware will be down. You would expect then that accessories would be down as well. So a mix shift there is going to drive that. Repeat the second part of your question for me?

Hardware pricing assumptions.

Right off the top of my head, I can't tell you exactly what we have in there for price declines on the hardware category or console by console. So I'd have to get back to you on that.

And we have time for one final question. That will come from Scott Tilghman with Caris & Company. R. Scott Tilghman - Caris & Company, Inc., Research Division: Two quick things I wanted to ask about. First on the revenue disparity between total sales and comps, I assume part of that is the 53rd week which I didn't think was called out. I also was curious if you were going to be, on the acquisition, reporting that separate and outside of comps or not?

You're talking about the acquisition of BuyMyTronics? R. Scott Tilghman - Caris & Company, Inc., Research Division: Yes.

That would be outside of comps. One of the drivers of differences between comp and total revenue include our Game Informer, our PowerUp Pro membership, Kongregate. BuyMyTronics would be a part of that as would currency changes. R. Scott Tilghman - Caris & Company, Inc., Research Division: And isn't 2012 a 53-week year?

It is a 53-week year. R. Scott Tilghman - Caris & Company, Inc., Research Division: And then second on the iDevices, really 2 questions there. One, do you feel like you have plenty of capacity at the fulfillment center or the refurbishment center if that ramps faster than you anticipate?

Yes, Scott. We've invested in, and I think you visited, we've invested in, what, 3, 2.5 years ago, we significantly expanded our capacity thinking about the electronics category and so forth, so yes, the capacity is definitely there. And of course, with BuyMyTronics, one of the things we have to do now is look at the mix of online versus store and also the SKU assortment in that there are other leading-edge types of handsets and tablets that we don't currently carry. So we have to understand that and that's part of what they'll bring us. R. Scott Tilghman - Caris & Company, Inc., Research Division: Great. Just on the inventory and the rollout plans, you're getting to 2,000 stores after getting to 1,200 fairly quickly. It seems like that's a slowdown from where you've ramped over the past 12 months. Is that just a function of inventory? Or is there something else holding that back?

Well, inventory is definitely the main driver on anything we do in the preowned business. But I think we're just trying to be cautious about execution and customer service. And when you roll out, GameStop’s very good at this business, but we have investments in training we need to do and technology and so forth. So I would say that's just our early estimate on how fast it can take. Very good. Okay, with that we will wrap up the Q&A. I want to thank everyone on the phone for your support of GameStop. And we look forward to speaking with all of you as opportunities arise. Thanks very much.

This does conclude today's conference. We thank you for your participation.