Revenue (Notes)

12 Months Ended

Feb. 01, 2020

Revenue from Contract with Customer [Text Block]

3. Revenue

We have revised the categories of our similar products, as presented below, to better align with management's view of the business. Prior periods have been reclassified to conform to the current period presentation. Net sales by significant product category for the periods indicated is as follows (in millions):



	Fiscal Year
	2019		2018		2017
Hardware and accessories⁽¹⁾	$	2,722.2	$	3,717.8	$	3,651.0
Software⁽²⁾	3,006.3		3,856.5		4,257.4
Collectibles	737.5		711.0		638.7
Total	$	6,466.0	$	8,285.3	$	8,547.1

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(1)	Includes sales of new and pre-owned hardware, accessories, hardware bundles in which hardware and digital or physical software are sold together in a single SKU, interactive game figures, strategy guides, mobile and consumer electronics, and the operations of our Simply Mac stores, which were sold in September 2019.


(2)	Includes sales of new and pre-owned video game software, digital software and PC entertainment software.

See Note 16, "Segment Information," for net sales by geographic location.

Performance Obligations

We have arrangements with customers where our performance obligations are satisfied over time, which primarily relate to extended warranties and our Game Informer magazine. Revenues do not include sales taxes or other taxes collected from customers. We expect to recognize revenue in future periods for remaining performance obligations we have associated with unredeemed gift cards, trade-in credits, reservation deposits and our PowerUp Rewards loyalty program (collectively, “unredeemed customer liabilities”), extended warranties and subscriptions to our Game Informer magazine.

Performance obligations associated with unredeemed customer liabilities are primarily satisfied at the time our customers redeem their gift cards, trade-in credits, reservation deposits or loyalty program points for products that we offer. Unredeemed customer liabilities are generally redeemed within one year of issuance. As of February 1, 2020 and February 2, 2019, our unredeemed customer liabilities totaled $226.9 million and $262.0 million, respectively.

We offer extended warranties on certain new and pre-owned video game products with terms generally ranging from 12 to 24 months, depending on the product. Revenues for extended warranties sold are recognized on a straight-line basis over the life of the contract. As of February 1, 2020 and February 2, 2019, our deferred revenue liability related to extended warranties totaled $70.0 million and $70.4 million, respectively.

Performance obligations associated with subscriptions to our Game Informer magazine are satisfied when monthly magazines are delivered in print form or when made available in digital format. The significant majority of our customers’ subscriptions is for 12 monthly issues. As of February 1, 2020 and February 2, 2019, we had deferred revenue of $42.3 million and $44.5 million, respectively, associated with our Game Informer magazine.

Significant Judgments and Estimates

We accrue PowerUp Rewards loyalty points at the estimated retail price per point, net of estimated breakage, which can be redeemed by our loyalty program members for products that we offer. The estimated retail price per point is based on the actual historical retail prices of product(s) purchased through the redemption of loyalty points. We estimate breakage of loyalty points and unredeemed gift cards based on historical redemption rates.

Contract Balances

Our contract liabilities primarily consist of unredeemed customer liabilities and deferred revenues associated with extended warranties and subscriptions to our Game Informer magazine. The opening balance, fiscal period changes and ending balance of our contract liabilities are as follows (in millions):



	Fiscal Year
	2019			2018
Contract liability beginning balance	$	376.9		$	426.0
Adoption of ASU 2014-09	—			(16.8		)
Increase to contract liabilities ⁽¹⁾	1,006.0			1,238.1
Decrease to contract liabilities ⁽²⁾	(1,038.7		)	(1,262.9		)
Other adjustments ⁽³⁾	(5.0		)	(7.5		)
Contract liability ending balance	$	339.2		$	376.9

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(1)	Includes issuances of gift cards, trade-in credits and loyalty points, new reservation deposits, new subscriptions to Game Informer and extended warranties sold.

(2)

Includes redemptions of gift cards, trade-in credits, loyalty points and reservation deposits as well as revenues recognized for Game Informer and extended warranties. During the 52 weeks ended February 1, 2020, there were $55.4 million of gift cards redeemed that were outstanding as of February 2, 2019. During the 52 weeks ended February 2, 2019 , there were $65.8 million of gift cards redeemed that were outstanding as of February 3, 2018.

(3)

Primarily includes foreign currency translation adjustments.