GameStop Cracks the XBox Live!

The Appetizer

GameStop launched their initiative to rely more on digital distribution for their revenue generation, calling it the “Store of the Future.”  As part of this initiative, they are selling over 2,000 PC downloadable PC games, along with free trials and other content. The biggest news regarding this initiative is that GameStop has discovered a way to sell products over Microsoft’s digital retail store, XBox Live Marketplace.  Players simply purchase unlock codes from GameStop and input them into the Marketplace in order to obtain the content they purchased

The Main Course

The Dessert

I don’t know why, but whenever I read something like this, you know what it makes me think– that Sega and Valve knew what they were doing and were way ahead of their time.  Obviously, one was more successful than the other in terms of their digital goals, but the foresight was there– they knew the future would be in digital/online content before anyone else was willing to take a chance with it.  Fast forward to now and we have major company chains like GameStop trying to find out how they can get a piece of the action.  The piece about this article that stuck out to me the most is their way in (or ‘around’– depending on how you look at it) exclusively managed digital distribution retail stores such as Microsoft’s Xbox Live Marketplace.  In a previous article, I mentioned how these digital retail spaces that all of the major videogame companies own and exclusively manage may serve as  a problem for a company such as GameStop unless they focused primarily on PC/Mac based gaming or found a way in to the systems by becoming a digital game publisher (and since writing that, they have done so).  It is obvious that none of the majors, just like GameStop during its current times of domination, have any interest in allowing another company, even a publishing partner, to  compete with them on their own system– and for understable reasons.  This is why the game publishing, and more notably the code unlocking purchase brings a smile to my face.  The former– because I predicted/suggested that would happen.  The latter because i didn’t think of that :) .  Seriously though– the latter is because it is a very intelligent, profitable, and retail friendly way for both companies to continue to profit and work together without causing friction. As a result, GameStop is on its way to surviving and evolving with the digital retail evolution of the videogame market.  In addition, it can use this same business model of code unlocking for all of the other digital retail platforms for each system. In hindsight though, there is some irony to this because ultimately, in order for the retail company GameStop to survive, it is going to have to successfully evolve into the one thing it is the primary supplier of to thousands of gamers– it has to become a [content/game] publisher to [game] publishers who are now [digital] retail stores.

The Overall Meal

3 Stars!

The Doggybag

What other digital revenue models do you think GameStop can implement that fits their business?

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