Earlier this month, leading video games retailer GameStop announced the hiring of Chris Petrovic as the company's new Digital Media Specialist. The move raised some eyebrows - GameStop, the leading brick-and-mortar establishment for games focusing on digital? But the fact is GameStop knows its business is going to be threatened by digital in the future if they don't act now to get prepared. GameStop began selling digital releases of PC games not that long ago, and more recently, the online storefront introduced a whole casual games portal.
On the conference call following the Q2 fiscal results, GameStop's Tony Bartel, EVP of Merchandising and Marketing, further commented on Petrovic's hiring and GameStop's digital strategy. "Chris is a seasoned veteran in terms of the digital media space, and we understand that the gaming arena is growing in new areas," he said. "Much of that growth is being driven on the west coast, so we opened an office with Chris leading that; we wanted to be close to the growth, innovation and investment that's happening in this digital space. Our primary focus, and Chris' primary focus is going to be on using our mass distribution and education channels that we have through brick-and-mortar to become the world's largest digital aggregator."
As much as GameStop will try not to be left out of the digital revolution, we think it's going to be difficult for them. Consumer perception is half the battle, and consumers surely don't look at GameStop as a digital leader. Oddworld Inhabitants' Lorne Lanning recently said that he think retail will be nearly dead in five years, and finding a retail game will be like trying to find vinyl in a music store.
2 Comments
August 22, 2009
Agreed. GameStop needs to launch their digital operation under a new brand if they are to succeed, STEAM IS digital distribution (on the PC) to the average gamer, unless they hand over their #1 position it will be hard for anyone to topple it (Pepsi vs Coca Cola anyone?). Line-extension seldom works, I hope GameStop realizes this for their own good.
August 23, 2009
The biggest difficulty for GameStop is not the line extension; if they were to create and push the best digital shopping experience for games they could get past the confusion with the brick&mortar GameStop (though I admit it makes things more difficult). The real problem is when, inevitably, a decision needs to be made for the digital aggregator that would have some negative impact on the b&m GameStop (or its suppliers). Would GameStop take a hit now in order to build the digital sales channel of the future? Unlikely, even in small ways. There will be lots of such decision points... such as the pricing flexibility possible for digital titles that's just not possible for real boxed versions. Will a digital GameStop drop the digital price of a title to $20 while the boxed version remains at $60, and risk a screaming publisher threatening to withhold new releases or co-op dollars? I don't see that happening, and as long as that's true I don't see how a digital GameStop could possibly dominate digital distribution.