GameStop Looks Into the Future, Sees Trouble

By  |  Thursday, April 30, 2009 at 2:37 pm

gamestopsignIt’s easy to imagine video games without discs or cartridges, but this downloadable future could spell disaster for GameStop. In a recent SEC filing, the world’s largest game retailer acknowledged that it sees the writing on the wall:

While it is currently only possible to download a limited amount of video game content to the next generation video game systems, at some point in the future, this technology may become more prevalent. If advances in technology continue to expand our customers’ ability to access video games, PC entertainment software and incremental content for their games through these and other sources, our customers may no longer choose to purchase video games or PC entertainment software in our stores.

This is sort of obvious, but as Gamasutra notes, in past filings GameStop has only referred to classic downloadable titles (such as Nintendo’s Virtual Console offerings) when discussing this subject matter. Never before has the company been so ominous about its ability to sell games of all kinds.

The gloom is appropriate as rumors abound regarding Sony’s next PSP handheld console. It would be the first time a major manufacturer dropped physical media entirely in favor of downloads and built-in memory. Handhelds are an ideal place to start with this business model, but come the next generation of home consoles, I wouldn’t be surprised if most games were offered for download, even if the disc-based model sticks around.

After writing about the PSP yesterday, it occurred to me that there’s still plenty of room for GameStop in a downloadable future, but not as it exists now. A better GameStop would mimic the resurgence of hands-on tech outlets, like the Apple Store, but with incentives for customers to purchase games at the store instead of at home. I’d like to see frequent buyer cards and an atmosphere that encourages try before you buy, to name a couple ideas. Download codes and kiosks may save GameStop from obsolescence, but it’ll take forward thinking, not fear, for the retailer to maintain its dominance.

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1 Comments For This Post

  1. adzzz Says:

    I agree they will face some serious challenges and a big chunk of the industry is going to go in this direction, but I also wouldn't discount the importance of a retail presence, the impulse purchase, and the value of a physical product.

    When you give someone a game for a Christmas present, you need to give them the physical game so they can crack it out of it's case, slip the disk in and fire it up. Giving someone a voucher code or telling them it is now available for download is just not the same.

    Even think about the size and shape of a DVD case – rather than small and efficient, it's designed to be bigger and more obvious to increase shelf appeal and grab a buyer's attention.