GameStop Considering Online Distribution Expansion

The Appetizer

Major videogame store retailer, GameStop, is well aware of the looming threat that digital distribution will ultimately have on its current business model.  With the major platforms slowly making shifts into selling the products online and through stores controlled directly by them (with systems such as PSPgo and now the Iphone/Itouch community being perfect examples), the need for a store such as GameStop is not looking too useful in the very near future.  Fortunately, the powers that be at GameStop are well aware of this, and are currently researching their potential options to combat this change and keep themselves, not only afloat, but porfitable as well.  The article mentions that they are looking into a few options, such as investing into an online distribution company, focusing more on PC gaming, and selling ‘points’ for purchasing online games. Whether they purchase an already existing service or just start one from scratch remains to be seen, but it will be interesting to see how GameStop redesigns their strategies in regards to the inevitable future.

The Main Course

The Dessert

What is clear is that GameStop’s executives have learned from others such as the music industry and similar outlets such as Blockbuster who found themselves crippled after ignoring new media driven technologies for distribution.  Instead of ignoring, they are embracing, and they are being logical about it.  Why would they want to push online games that are for XBox360 or PS3 when they have no control over their online outlets– do you really think Sony and Microsoft will give their customers an option of going to another online store to purchase items for their system, when they can keep a clutch over it and keep all of that in-house– absolutely not!  The possibility of focusing strictly on the PC industry is very smart, as there are more of those in the wild than gaming systems, and more opportunities for them to therefore make money.  Are there other options– definitely.  While they may not be able to be a competitve online store persay over Microsoft or Sony’s respective systems, what would stop them from becoming a distributor of games over it, possibly for independent game developers?  They could sign exclusivity in distribution deals as well for major games- which coud, in turn, force Mircosoft, Sony, and Nintendo to possibly allow for another outlet for people to purchase games online.  Let’s not forget the mobile game market, and all of the IP delivery services for games that GameStop  could literally turn into a subscription based service, or videogame download rental service that could go straight to television sets, or computers, therefore bypassing the need for the other platforms.  In fact it  could end up being more profitable down the line.  The question is what direction(s) will they choose?

The Overall Meal

3 Stars!

The Doggybag

Do you think companies such as GameStop will be able to remain relevant and profitable as digital distribution increases its foothold in industry and becomes the norm?

Let the debate begin (below)!

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