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Wii U Is Game Changer: GameStop CEO

GameStop is taking more market share and should benefit from the emerging game console cycle as the launch of the Nintendo Wii U leads to another wave of innovation, CEO Paul Raines told CNBC's "Squawk on the Street" on Tuesday.

"The console cycle has been the longest in history and I think Sony and Microsoft would probably agree with that," the GameStop executive said. "The fact that Nintendo now has a product coming out is putting pressure on everyone in the space because consumers are looking for innovation and I think you'll see new products from the other manufacturers."

Raines called the new Nintendo Wii U a game changer because its tethered tablet allows gamers to play both tablet games and high-definition games.

GameStop is also looking to dispel concerns that its business is in decline.

"This is really a cyclical business and we've created a digital and mobile business that didn't existing a few years ago," Raines said. He predicts the digital business will do about $600 million in sales and the mobile business will see $150 million to $200 million in sales.

The company is also buying back stock and paying dividends.

(Read More: The Most Anticipated Videogames of 2013.)

GameStop is also taking business away from online retailers and toy stores. "There's a lot of game play that is intersecting with toys and we didn't see anyone serving that well so we created a GamesStop Kids popup brand for the holidays," Raines said.

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