The Motley Fool Take

Video game retailer GameStop (NYSE: GME) recently reported a very good quarter, with earnings up 151 percent year over year and revenue rising 42 percent to $1.81 billion. CEO R. Richard Fontaine said that he is "very bullish on the future as three major metrics are transforming the business and accelerating the potential for GameStop growth."

The first metric, the installed base of current generation game consoles, such as the PlayStation 3, Xbox 360 and Wii, grew by 31 million units last year, expanding GameStop's addressable market by about 34 percent.

Second, gamers are not just the stereotypical young males anymore: Fontaine says that 38 percent of gamers are female. Many may have been drawn in by rhythm-based games such as Guitar Hero. Wherever new gamers are coming from, the market is growing.

Third, the upcoming slate of games includes sequels to three of the industry's best-selling franchises. It also doesn't hurt that Grand Theft Auto 4 was released five days before the end of the quarter.

The video game market is exploding. Games are edging into new demographics as game publishers get creative with the capabilities of the latest hardware platforms. GameStop is building out its store network to take advantage of these trends. The company is worth a closer look.