Good morning, everyone and welcome to GameStop Corporation’s fourth quarter and 2007 full year earnings conference call. (Operator Instructions) I would also like to remind you that this call is covered by the Safe Harbor disclosure contained in GameStop's public documents and is the property of GameStop. It is not for rebroadcast or use by any other party without the prior written consent of GameStop. At this time, I would like to turn the call over to Mr. Dick Fontaine, Chairman and Chief Executive Officer of GameStop Corporation. Please go ahead, sir.

Thank you and welcome to GameStop's 2000 [sic] year-end conference call. I am Dick Fontaine, GameStop's Chairman and CEO. With me this morning are Dan DeMatteo, our Vice Chairman; Steve Morgan, our President; and David Carlson, our Executive Vice President and Chief Financial Officer. This morning we released our 2007 numbers and gave the market the first look at 2008. Obviously 2007 was outstanding for GameStop and we believe 2008 is shaping up to be even better. While David’s going to take you into much more detail, I do want to stress the highlights of our financial year. Total sales increased 33%, comps an amazing 24.7%. Our SG&A leverage improved by 2.5% and our total operating earnings increased by just over 50%, with net income increasing to $288 million, an 82% increase over fiscal 2006. By any barometer, another outstanding year for GameStop. During the year, we opened 586 new stores worldwide and all stores were funded with operating cash flow. And in spite of this aggressive store growth, we ended the year with a cash balance of over $857 million. We opened 328 new stores in the U.S. and 258 in our international markets. During the year, we opened new stores in every one of the 16 countries where we are doing business and we finished the year with 5,264 stores. In 2008, we are forecasting that we will open between 575 and 600 additional stores. Approximately half in the U.S. and half internationally, with roughly between 175 and 200 of these openings internationally slated for Europe. Clearly we see many growth opportunities into a robust video game market in the U.S. and abroad, and while our new store ROI has always been strong, in 2007 our new store performance rates were highest ever. The results in 2007 reinforced…

Good morning. Before the market opened today, we released our sales and earnings results for the fourth quarter and full year of fiscal 2007. GameStop sales for the fourth quarter increased 24% to $2.9 billion as compared to $2.3 billion in the prior fiscal year. Comparable store sales for the fourth quarter increased an amazing 17.4%, considering the 26.5% comp achieved in the prior year. These results were driven by exceptional results across all categories. New hardware sales grew 19%, with sell-outs of Nintendo’s Wii and DS systems, Microsoft’s Xbox 360, and Sony’s PSP handheld. New software sales grew 38%, driven by strong sell-through of Call of Duty 4, Guitar Hero 3, Rock Band and Super Mario Galaxy. Finally, used sales grew 25% during the holiday quarter, with value conscious customers purchasing these products at astounding rates. You should note that all these quarterly growth rates are comparing the 13 weeks of 2007 to the 14 weeks of 2006, and would be even higher if the extra week in the prior year were to be eliminated. Net earnings for the quarter were $189.8 million, increasing 46% over prior year quarter net earnings of $129.8 million. Diluted earnings per share for the quarter were $1.14. These results were $0.02 per share higher than the high-end of our guidance issued on February 15th, due primarily to lower than expected foreign tax expense during the fourth quarter, resulting from profitability in many European countries much, much earlier than expected. Gross margins were fairly flat year over year for the fourth quarter; however, SG&A leverage improved by 50 basis points due to strong sales comps, cost controls, and international growth leverage. This allowed operating margins to increased by 40 basis points to 10.2% in comparison to the prior year quarter. GameStop sales for the…

Thanks, Dave. As everybody has mentioned, 2007 was a fantastic year and we think that the business only gets better from here. A record number of consoles, as Dick mentioned, and handheld systems were sold last year, which will set up 2008 for another strong software growth year in videogames. As a matter of fact, the 31 million hardware units sold are 35% higher than the previous record in 2006, proving once again that the video game market has reached the mass market. This growth in installed base, a very strong title lineup, and historical tie ratios implies that 2008 will set another record for video game software and we see year over year growth in the 15% to 20% range. Some of the best-selling titles for the year are expected to be Super Smash Brothers: Brawl from Nintendo for the Wii; Grand Theft Auto 4 from Take Two for the PS3 and Xbox 360; Gears of War 2 from Microsoft for the Xbox 360 in the fourth quarter -- we expect this to be very, very strong, especially at GameStop, as we performed very well with it a couple of years ago; Wii Fit from Nintendo for the Wii, another breakthrough use of a video game console, an incredible new way for any member of the family to get into exercising; Metal Gear Solid 4 from Konami for the PS3; Army of Two for EA, just recently released for the PS3 and the 360; and World of Warcraft from Vivendi for the PC. In addition, there are many other great franchise titles releasing or under development, as well as a lot of new original IP, like Prototype and Ghostbusters. While it would be impossible to quantify the investment and worldwide development of games, it’s likely to be at an…

(Operator Instructions) Our first question of the day goes to Benjamin Schachter at UBS. Please go ahead.

Congratulations on a fantastic year. A few questions; I was wondering if we could walk through how you think internally of same-store growth and how you would advise the street to look at it? Because I think a lot of people do look at it in the similar sense that they look at other retailers and maybe that might not be so appropriate. Another question on used growth -- I was wondering if you could say what will be the drivers to get that used growth to grow faster than new over time, or should we not expect that? And then finally, I noticed you have some stores where the tournament play and trying to expand the stores there. Is that something that we should look to continue into 2008? Thanks.

On the same-store growth, we’ve always tried to talk about how people really need to focus more on software growth than same-store growth because if you’ll recall, how the industry works is the hardware prices come down over time and it puts pressure on the same-store comp number. But as the comp number comes down, typically software grows even faster and used software as well grows faster, and so your EPS growth will be somewhat inverse to your comp growth. So when you have really, really high same-store sales numbers, you may have a nice EPS growth number but as those come down, you can actually have higher EPS growth numbers. So it is a little unusual. It’s not typical retail where you say the same-store sales and EPS kind of match each other, so it is something everyone has to be very aware of here and something to really look at is to look at software growth rather than being so focused on comp store growth.

But I think inherent in your question as well, at least I’m assuming you were referring to the fact that the growth in our business and the growth in this industry to some degree is running counter cyclical to a lot of things. A 24% comp growth in retail is astronomical, almost never seen and while it’s true this year, for many of the reasons that David indicated that our comps are looking to be in the 10% to 12% range, again by traditional retail double-digit comp increase, particularly in the economy that is at best worrisome, is really outstandingly strong. And again, just to add additional reference points to what David said, when we build these comps we build these comps on the things that Dan and David had referred to. The titles that we see coming in the installed base and the third one is obviously the changes in prices, predominantly in the hardware. But net net, while 24% is outstanding, in my mind 10% to 12% comp growth is another form of outstanding. Dan, do you want to handle the used?

I’ll talk about the used and why and how it grows. As new software sales go up, trades go up as people trade in games and use it as currency to buy new video games. Especially we have been seeing in the first couple of months of this year, given the economy, our trades as a percentage of cash used on new video game sales has actually gone up. So we are actually building inventory. So what will happen is over time these used software sales will approximately match new software sales, not in any one quarter because of quarters like this, for example, where we have a Grand Theft Auto and a Super Smash Brothers, new game sales will be extremely strong. But over time, those trade-ins will sell and the used game sales will grow like the new game sales do. So we are expecting for this year approximately used video game sales will grow like new over a period of the year. The tournament store, we got into tournaments in our stores. We realized there’s an opportunity to do that better and in a bigger way. We have built a prototype store out in the San Jose market. It’s going very well. We have several others slated for this year in other markets and we’ll continue to refine it as we see how it goes.

One quick follow-up, if I may; Super Smash Brothers, I was wondering if you could rank that in terms of how it will compare to other big titles of the year, like Grand Theft Auto or Gear? I just know that this title has not received that much attention on the street. Thanks.

I think it should be getting a lot of attention. I would say it will most likely be in the top five for the year, if not towards the top of the top five. It’s a very, very significant title and it’s selling through very, very well. I believe Nintendo announced the first week sales in the U.S. of 1.4 million, something like that. So a very, very strong start for one week for Smash Brothers.

One thing about a title like Smash Brothers too, it will have a very broad audience. It won’t be as narrow as something like a Grand Theft Auto, potentially, which means it will have a long tail on sales.

Thanks and good luck into ’08.

Our next question goes to David Magee at Suntrust Robinson Humphrey.

Good morning. Great quarter. A couple of questions; one is the -- what have you assumed with the price cuts on the hardware side this year, as far as anything significant on that side in your numbers?

We haven’t assumed huge amounts of price cuts but we have assumed a couple. You know, the PS2 is still selling very, very well at $129. When we did our budget, we assumed there will be a cut to $99. We have no knowledge of that but we are making an assumption there. We are also making an assumption that both the Xbox and the PS3 have about a $50 price cut some time during the year, but again we have no knowledge or verification of any of those but that’s just kind of the assumptions we’ve used when we’ve put those into our models. But those -- we’re not assuming any price cut on the Wii or the PSP at this point, so that’s kind of the things we’re looking at price cut wise.

So would that mean then that the dollars would be up for the year on the hardware side?

Oh, definitely. That is definitely the case. We’re looking at kind of a different dichotomy here. The amount of hardware that we are going to sell we believe in 2008 or the industry is going to sell is going to be more than 2007, significant growth -- significantly more, I guess a couple million more. So we are pretty excited about that and we haven’t seen that always in the past. Typically you have a year where you have a peak amount of hardware units sold and then it starts to come down and we believe that that is going to continue to grow, thus our hardware percentage of sales or our sales mix isn’t going to come down as it has historically. You are going to find that it may come down 1.5% or 2% for the year from 2007 only and thus our gross margins probably won’t grow as much as some people might have expected. But that being said, our comps obviously are much higher than I think what a lot of people expected.

In addition to that, while it puts some pressure on the gross margin, the fact that it is a phenomena that I believe we have never experienced in this business, to have a two-year cumulative installed base grow as we did in 2007 and as we are forecasting in 2008 really forms the backbone for why we really believe this business has moved into the mass market and why we also believe this business is going to have a much, much longer growth and earnings tail than some models might indicate.

So then with the good hardware sell-through this year maybe above what we thought a few months ago, it’s setting up a pretty good year potentially for software again next year, pretty strong?

That’s certainly the case.

Again, as I mentioned, David, I think the models or the trends of the past are a thing of the past and with the broadening of the audience, et cetera, I can’t envision any year into the future where we are not going to have double-digit software growth.

Thank you, Dan. Is there anything different as far as the distribution model that you see coming down the pipe that would give you pause, at least for the next several years as far as the stability of your retail model?

I’m sorry, I didn’t understand the question, David. Could you pose it again?

Is there anything with digital downloads or anything else that’s different than we talked about in the past that would give you pause about the retail models the next several years?

No, I think the trends of digital downloading are pretty much all in front of us right now. There’s going to be some application in terms of levels and there’s going to be some downloading of very old albeit very good games that use far less memory. As we’ve said before, we see it at this stage in so far as we see it done in the future as being additive, not dilutive to the game experience and therefore the GameStop model. Just as a case in point, is that I heard a statistic the other day that indicated why full fledged downloading of very large files coincidentally to major releases at best is way into the future, is that the amount of content being pushed out by YouTube today equals the total of content being pushed out on the Internet in all of 2000, the year 2000. So we’ve got massive, massive uses of digital downloading, the peer-to-peer video sharing just being one of them. We see small files, we see small purchases, micro purchases, but again we’re looking at that as being additive to the experience and in no way threatening to us.

Great. Thanks a lot.

Our next question goes to Tony Wible at Citigroup. Please go ahead.

Congratulations again, guys, on the quarter. I was hoping you could maybe update your view on how penetrated you feel you can be with the U.S. store base. I guess a few quarters ago you guys had talked about some targets. Have those targets changed at all with the gaming trend expanding as you’ve described?

Yes, they absolutely have and if you go back even a number of years ago, we were looking at metrics that assumed a much large population base for the stores than we are currently looking at, and that has pretty much changed every year. And to some degree, it has changed in direct proportion to the overall growth of the business and frankly right now, the tremendous change in the demographics. We have done numerous tests to determine from a demographic standpoint what -- and this is -- I’m now talking about the U.S., what our future potential is. We just had an updated version based upon some new metrics that we are using and our real estate people working with the brokers around the U.S. have come back and feel very comfortable using the current metric that there are additional 1,685 potential locations available yet for the GameStop model. So you can see even if we are approaching half of those, 200, 300 store a year growth for the long-term future is well within our possibilities. And keep in mind this demographic growth, the broadening of the market that we are referring to, we actually think that that’s going to continue. The most important thing here is not just the technology of the Wii but it’s the size of the market. There are so many people looking at making significant investments with this growing demographic because obviously the returns can be huge if they have a winning product, that we are going to see more and more products that are going to drive more and more applications that are going to drive more and more consumers. So we are going to keep ahead of that with our new store growth and we continue to see opportunities.

Great, and I was hoping lastly you could provide a little bit more clarity on your inventory expectations. Clearly I think inventory on the Wii is going to be tight but has the 360 inventory issues from the beginning of the year cleared up and are you seeing any other inventory issues?

As I mentioned, most of our supplies have improved. Right now, we are not seeing any problems with the PS3 and we should have a good stock of PS3s in place when Grand Theft Auto 4 launches, PS2 the same. PSP, we’re still anticipating shortages for the next several months. The Wii, we have been seeing increased flow but we still anticipate it’s not going to meet demand potentially for the next two quarters. The Nintendo DS, we have received better flow and increasing allocations, so that’s improved. And the Xbox 360, we have had increased allocations, so that has improved. So we are experiencing record hardware sales as we speak. I think February’s NPD data showed huge growth in hardware. What was the percentage? Twenty percent growth and I can tell you there were a lot of shortages, because that could have been a lot higher. So it’s -- to summarize, it’s getting better. I think most everything will be caught up soon with the possible exception of the Wii.

Great. Thank you.

Our next question goes to Arvind Bhatia at Sterne, Agee. Arvind Bhatia - Sterne, Agee & Leach: Thank you and my congratulations as well. A couple of questions; first on Europe, I was wondering relative to the U.S. market, where you are guiding 15% to 20%, help us understand relatively, you’re expecting more growth there this year. And then I want to understand the refurbishment, you know, the economics there and also $175 million in CapEx, how much are you going to spend on that business? And when you are refurbishing, the margins on that, how much do they vary? Just help us understand the economics there a little bit.

Let me take on the first one and I think Dan can take on the second. Yes, we are seeing growth internationally that either exceeds or keeps pace with the overall growth that we referred to. It is obviously different in various countries but the truth of the matter is that these significant transformative changes that we talked about are also happening in our three major markets that we referred to -- Europe, Asia, and Canada. Indeed, in Europe particularly we could say that the growth is somewhat behind and lagging at least the U.S. market, which means their comps could very well be somewhat stronger. There’s variance, obviously, between the countries in Europe but the market itself looks very, very robust. The same is true in our Australian/New Zealand market, particularly Australia and the same is absolutely true in Canada. So we certainly anticipate that from a growth standpoint, we will probably get a higher growth percentage coming from Europe and we see Australia and Canada definitely keeping pace with the U.S.

On the refurbishment, CapEx on the refurbishment will be not large this year. I think actually last year we put in a new warehouse management system and also a new mezzanine that allowed us to expand the number of work stations, so last year was larger in the United States. International though is behind the United States and we will be spending money to establish facilities, more modern facilities for refurbishment there. On the economics, the refurbishment slightly reduces the margin on used video games because we have to fix things that are broken. As I mentioned, it’s an absolute necessity to be into the refurbishment business if you are into the used video game business because you will buy back products that need to be refurbished. And if you don’t have this type of facility and you destroy that product, you will drastically reduce your gross margins. So it’s an absolute necessity to be into the business but we look at it as a good thing because the more things we refurbish and not destroy, the more things we have for sale. Arvind Bhatia - Sterne, Agee & Leach: And it’s a competitive advantage, clearly, but my question is on the -- I guess is that the reason why within the used play, pre-played category, gross margins were slightly down versus last year? I assume that had something to do with it. Or was it just the mix within that? Because that’s one of the questions I had gotten this morning.

It’s two things -- the largest portion was the increase in refurbishment which drove the sales. The second reason was that the immaturity in our used video game business --

One moment, please. We have a technical difficulty here. Please stand by. The speakers’ line dropped, so we are going to reestablish with the speakers. (Operator Instructions) Yes, you’re back and Mr. Bhatia’s line is still open. Arvind Bhatia - Sterne, Agee & Leach: Thank you.

Great. We’ll have to apologize. We’re having a thunderstorm here and we just had a power outage.

The good news is our back-up generator kicked in.

We have everyone still online, so we’re fine.

Okay, great. I was answering the question on refurbishment and getting to the second point. The second point, it is mix but it is mix of used game sales, U.S., and international and the international is less developed than what we are here in the U.S., so as you are developing your business in the country, your margins will be slightly less.

And I would really point to the fact that there’s part of that that is very good news, as I mentioned, is that every country and every culture has really taken to the new and used model but the truth of the matter is that it’s far from promoted in a lot of the European countries. So as we are pushing the GameStop model harder, we think there’s tremendous upside. We are starting from a lower base but we are showing great growth every year. So as Dan says, when you take the worldwide mix, there’s some impact but there’s far more opportunity in the future. Arvind Bhatia - Sterne, Agee & Leach: Great. Thank you, guys.

Our next question will go to Colin Sebastian at Lazard Capital Markets. Please go ahead.

Good morning and thanks for taking my question. I wanted to ask about the margin expectations for 2008 in a little more detail. You mentioned obviously a few of the things impacting the gross margin line and I was wondering if there is anything incremental on the operating cost side that we should be considering during the year as we model the leverage potential in the model. And then secondly, I know it’s a little bit early to ask the question but you mentioned the double peak in industry sales, the cycle, so in terms of your longer term expectations, when are you assuming that next generation of consoles might hit the market? Thanks.

Let me take a fearless shot at the last question and first be willing to say that I have no idea 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. We can start with the PlayStation 3 for one, to some degree a little bit less with the Xbox 360. The horsepower in those units I think is going to really point to a much longer cycle with those. Also, the size of the investment is gigantic. Therefore, I think if you look at what has happened to the PS2, I don’t think it’s unreasonable to believe that the PS3 and to some degree, maybe even the 360 could still be generating growth when we get out three, four, five, six years into the cycle. Honestly, the Wii is such revolutionary technology and I think it has so stimulated the R&D, at least on the Nintendo side, but the other side is -- you know, I really don’t know. My guess would be it wouldn’t be so much that we are going to see as much a new unit as we are going to see new applications and new accessories for the unit, and that could change the real fundamentals of who the customers are.

Okay, so 2010 is probably too early to expect a new batch of hardware?

You know, if you’re talking in the macro sense, I would say later rather than earlier would be my guess.

And then on your question on the gross margin and SG&A guidance for 2008, on the gross margin, as I said we are looking for some fairly significant hardware growth in 2008 and that is really the only thing that is really affecting the gross margin guidance. And then on the SG&A guidance, we are looking to add some costs in branding and advertising. Our new power to the players brand has been very successful and we are going to be adding some television and radio type advertising during the year, so that probably will take about a tenth off of the SG&A leverage. But other than that, there aren’t any unusual items in SG&A, no.

Okay, thanks and congratulations on the year.

Our next question goes to Ed Williams at BMO Capital Markets.

Good morning. A couple of questions; first of all, [sort of take another look at Arvind’s] questions on the international market. Can you give us an idea as to what the percentage of revenues were that came from outside of say North America, and the profitability of the European store base as you look at them by country? And then, to the follow-on, on your comments about the used business and the European market or international markets, how does the revenue mix per store look? The average European store versus the average North American store and used versus new and hardware versus software?

Let me start out with the European store base and what we are looking at profitability. If you recall last year in 2006 when our 10-K came out, we had about $1 million of operating profit in Europe. I will say although we haven’t disclosed that number yet and it will come out with the 10-K in a couple of weeks, we have improved that profitability significantly in 2007, and you are looking at many, many times that operating income number for 2007. Nearly all of the countries in Europe are profitable at this point other than one, Spain. We are looking at profitability all over the Scandinavian countries, which had not been profitable. We were looking at profitability in Ireland, which had not been profitable and Germany and Italy continue to be profitable. So we had significant growth there in operating earnings which we are very happy with.

Was that growth driven on the SG&A side or on just the revenue scale?

I would say a little bit of both. The revenues obviously went up. We had a lot of general office and warehouse facilities built when we purchased the operations in Europe and the number of stores that we’ve added obviously has helped that profitability significantly.

And relative to the run-rate on the stores, particularly dealing with Europe, if we were looking at full maturity to full maturity ranges on the U.S. and Europe, actually the European stores and predominantly because they are in malls, but actually have somewhat of a higher rate of sale. That’s offset generally by somewhat higher rents, so the return on investment should be very much like the U.S. Europe, as you know and as we’ve mentioned, is much more immature than either our Canadian or our Australian markets, or certainly our U.S. market. But on a full mature basis, we fully expect that because of the stores and where they are, we are anticipating a somewhat higher sales per square meter.

Okay, and if you look at the additional stores you are going to add in 2008, I think you had said about half of them would be international. How many of those are going to be going into the European market versus the Canadian and Australian markets?

We’ll put about roughly between 170 to 200 of those roughly 325, 350 stores will be in Europe. Both Canada and Australia will continue rapid growth but the majority of them, almost two-thirds of the international stores will be in Europe.

Okay and are you seeing anything on the competitive landscape in Spain and Australia, where I believe that’s where Game Group is competing with you?

Game has entered the Australian market. They’ve been there about a year. There has been some impact on a few of our stores where they’ve gone in as the second player in a mall but by and large, there’s been almost minimal effect. Our share is huge in Australia. Our comp stores actually exceeded the U.S. last year. Our growth is far more accelerated actually in Australia than it has been in the past. And while I think that we will continue to have competition there, the team and the results we have certainly put us in excellent position. Game is also a major player in Spain and Portugal. Our reason for being a little bit slow out of the gate there is that an acquisition that we made shortly before we completed the merger with EB really put us into what I called old Spain with more neighborhood stores as opposed to new Spain, which is the malls. Since that time, we have closed about 28 of the neighborhood stores and have ramped up our growth in the mall and the major grocery store centers and again, the growth from those in Spain has been outstanding. There’s no question in my mind that Spain is going to be a very profitable country for us but we are very immature there.

Okay, great and then last question is can you comment a little about what you are seeing with your market share of the family oriented software -- the Guitar Heroes, the Rock Bands, and include with that the hardware with Nintendo and how that has performed over the course of the last 24 months or so.

I think that one of the misconceptions that people used to have about GameStop is we perform really well with the hardcore and not as well with the general and more family oriented games and that couldn’t be further from the truth. As a matter of fact, because of our new stores and where we’ve located them and co-tenancy with many of the mass merchants, et cetera, we perform very well on all types of titles, including the G rated and the family oriented titles. I will tell you that our market share on Super Smash Brothers, which I think could be considered a family oriented title, was I don’t want to say an all-time high for a Nintendo title but it might have been. I think it was our first week market share for a Nintendo title was at an all-time high. So we are performing very, very well with those, with the Rock Bands, with the Guitar Heroes, and with the family oriented titles, just as we perform with the more mature and edgier titles.

And another point to keep in mind is as we’ve been able to put more stores in more markets, more and more of our stores are becoming increasingly convenient and convenient to neighborhoods, which has made it far easier to drop into a GameStop store, complete your transaction. That, coupled with the fact that as I mentioned, the GameStop brand has been gaining traction and more and more people are beginning to understand that trading a product in is really just another form of currency and a way of lowering their cost of video gaming. So I think a combination of all of those, as Dan has indicated, has at the very least kind of changed the definition of a specialty store versus a mass merchant and we are drawing much, much closer to that, given our model and our locations.

I would just add that if you go into our stores and you see the number of moms who are bringing in kids who can’t drive yet, obviously, in tow purchasing games and trading games, moms love our model and they love our model because they can trade in those games, as Dick mentioned, reduce the cost of a new game with the games that they are no longer playing.

Okay, great. Thank you.

We have time for one further question and that question this morning will come from Bill Armstrong at C.L. King & Associates. Please go ahead. Bill Armstrong - C.L. King & Associates: Thanks. Most of mine have been answered but new software gross margins were up a little bit in the fourth quarter. How did that come about?

The gross margins on certain very popular games during the fourth quarter were a little bit higher than typical. Some of those include Halo and Guitar Hero, so it was -- it’s a very small increase, actually, so it’s more of a mix of products than anything else. Bill Armstrong - C.L. King & Associates: Okay, so it wasn’t anything with pricing trends or anything like that?

It had nothing to do with pricing trends.

Some of it is some of the special editions have a little higher margins, too. Bill Armstrong - C.L. King & Associates: Okay, and it sounds like you are seeing -- it looks like you are seeing pricing holding up pretty well on software?

Yes, we are seeing new game prices absolutely holding up on all platforms, as they did last year. So the customer acceptance of the $59.99 price point on the PS3 and 360 and the $49.99 on the Wii have held. Bill Armstrong - C.L. King & Associates: Okay. Just to clarify something I think I heard earlier -- you expect both hardware units and dollars to grow in ’08?

That is correct, yes. Bill Armstrong - C.L. King & Associates: Okay. For Q1, looking at very big comps, obviously have some big titles. Are you also looking for software to -- sorry, hardware to increase as a percentage of the mix or will that start to come down?

For the entire year, we are looking at it to come down slightly as a percentage of sales but just slightly. As I said, maybe 1.5 to 2 points on the mix, on the total mix. But in the first quarter, as you saw from the NPD numbers in February, the hardware dollars are still growing very, very strong.

Anything else, Mr. Armstrong? Bill Armstrong - C.L. King & Associates: One more question -- you are going to open close to 600 new stores. How many closings should we model, just to get a net number?

We will have closed in 2007 100 stores and about 66 of those were U.S. and the rest were international. The majority of the international were, as I mentioned, the Spain. I think the 2008 number is 60 to 70 stores, something like that. Bill Armstrong - C.L. King & Associates: Sixty to 70.

Yeah, which on the portfolio size that we have, you should keep in mind, is very, very small, which speaks to the profitability of the stores and just also to put another point on it, generally speaking when we close the store, it’s actually financially advantageous. Bill Armstrong - C.L. King & Associates: In what way?

Well, often what ends up happening is that we are in a position where the least of the performers are the ones that we choose not to renew the leases and/or we’re in a position where we have got a more profitable store that we feel we can transfer the sales to. One of the elements that we look at very, very closely in any given market is if we decide to close a store, what percentage of the business do we feel we can transfer to another store? And our performance on the part of our store personnel in transferring those sales has been very, very good so it makes it easier for us if we feel we can become more profitable by closing certain overlap stores to do so. Bill Armstrong - C.L. King & Associates: Okay, and then finally, you mentioned you are getting a more advantageous lease terms. Are we talking about lower rents or some other aspects of the deal?

You know, it can be just about anything. It can be lower rents. It can be more flexible rents. It can be build-outs, any number of things. And again, I don’t want to overstress that. Our return on investment on our new stores is so strong that we don’t need those but clearly what’s happened is that GameStop has become almost a specialty anchor in many of these projects. This is particularly true in the U.S., so developers more and more are trying to get us to sign up earlier and earlier and obviously that shifts the negotiating leverage to us and our real estate people are very, very good at that and they are really delivering quality to these projects, so yeah, we look at improving on our metrics every year and we think 2008 we’ll be probably one of the best at that. Bill Armstrong - C.L. King & Associates: Okay, great. Thanks.

All right, thank you for joining us today. Obviously we are ecstatic about the 2007 year. I certainly hope you can tell in not only our answers to the questions but our comments. We are extremely enthused about 2008 and we absolutely do believe that the fundamental transformative stages of this business, the metrics that we referred to, this business is changing very rapidly. It’s changing for the good and we think that GameStop is in the ideal position to continue to take advantage of this absolutely outstanding industry. Thanks for supporting us and thanks for being with us today.

Thank you. That does conclude the call. We do appreciate your participation. At this time, you may disconnect. Thank you.