Game publishers and game retailers have, at best, an uneasy relationship – so what happens when one becomes the other? It’s a growing question that should make for some interesting times in the years ahead.
Valve Software kicked off the hybrid developer/distributor model in 2003 with Steam, and it wasn’t long before Electronic Arts and Activision followed suit with their own online stores, giving them more control of (and higher margins from) the sale of their games and in-game content. Microsoft and Sony, meanwhile, straddle the fence with the storefronts that are built into the Xbox 360 and PS3.
But the latest – and strangest – entrant to this mash-up comes at things from the other end of the spectrum, though. GameStop recently announced plans to buy social and casual games maker Kongregate – the second developer acquisition from the brick and mortar powerhouse within a year. (The company bought Jolt Online Gaming, a maker of browser-based games, in late 2009.)
Kongregate has 10 million monthly players who spent 23 million hours per month on the site. That’s a lot of eyeballs sticking around for a long time. And it’s a safe bet that the company will make every effort to convert those people into customers – but it’s not likely to end there.
GameStop previously announced that it wants to be an aggregator of digital game content over time. This could mean that games from Kongregate could end up on the company’s retail site, increasing the amount of time that people spend there – and giving GameStop better intelligence on the types of games people like, which will allow them to better customize the shopping experience.
It’s a sound beginning for the strategy, but one that leaves a lot of questions nonetheless. Will people buy more from the company online just because they can play games there? Or, as digital distribution expands, are customers ultimately going to be lured by whoever has the best price?
Despite the questions, the Kongregate acquisition certainly makes more sense than the launch of GameStop’s latest Facebook game – Gangsta Zombies. To play, consumers have to pick up a promotional game card at any U.S. GameStop location. The company is also offering a $10 pre-paid card for premium in-game content.
I get it. They’re hoping to get a piece of the microtransaction pie that’s lining the pockets of Zynga and other social gaming companies. But by requiring people to drop by their store, they’re shooting themselves in the foot. The key to social gaming is convenience – and there are a plethora of other titles on the market. Having to go into a store just to be able to play a Facebook game is the antithesis of convenient.
GameStop may be indeed on the right path with its push to add in-house development to its arsenal, but it seems to be taking a few bizarre detours along the way.
Extended Play is a bi-weekly column examining trends and upcoming events in the video game world. For more articles by Chris Morris, be sure to visit his blog.
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Scott Steinberg is the CEO of video game consulting firm TechSavvy Global, and founder of GameExec magazine and Game Industry TV. Hailed as a top technology and video game expert by dozens of publications from USA Today to Forbes and NPR, he’s covered the field for 400+ outlets from Playboy to Rolling Stone. A frequent on-air analyst for networks like ABC, CBS, NBC and CNN, he’s also the author of Video Game Marketing and PR.
Good article, but the criticisms are the end are based on a false premise, you don’t have to have a card from GameStop store to play Gangsta Zombies. You can play it online and spend money in online microtransactions just as easily as in any other Facebook game, but with Gangsta Zombies, there’s an added in-store promotion that enters you into a competition and gives you a bonus avatar. But there are no restrictions that require you to use the card.
There’re also in-store cards you can buy for $10 if you want to use cash for in-game microtransactions (in case you don’t have access to a credit card), but no one’s required to drop by the store.