Can GameStop Make Retail and Cloud Coexist?

Can GameStop Make Retail and Cloud Coexist?

No one can accuse GameStop of dragging its heels on adopting new digital and cloud video game distribution technology. Last March, after it acquired Spawn Labs and Impulse, GameStop chief executive Paul Raines said that the retail giant is moving closer and closer to becoming a “technology company.” It looks like the technology train is rolling on: During a quarterly investors conference call, GameStop announced it would be testing out Spawn Labs’ peer-to-peer game streaming as early as this July.

GameStop said that its dedication to retail distribution still came first, but finds that it’s necessary to “[create] a channel to get to where the customer is at.” Can GameStop make retail and cloud gaming co-exist side-by-side?

GameStop can, at least for a time. The chain obviously doesn’t want to jeopardize its position as King of Game Distribution, and it probably won’t make any drastic moves to do so in the next few years. Triple-A retail titles still sell in the millions, and the first new game system of the new generation, the Nintendo 3DS, gives at least some indication that physical game media will not be abandoned, at least not wholly, for a while longer.

Also, if streaming games does become widespread, it’s going to take considerable time until people are comfortable enough with the process to adopt it over old-fashioned plug-and-play, or even the process of downloading a game to a hard drive. Finally, a large percentage of video game sales still come from non-gaming relatives and friends who just want to walk into a GameStop and walk out with a specific game.

All that said, GameStop shows good judgment by tinkering with game streaming technology as early as possible. As the Wall Street Journal pointed out last April, GameStop is moving to adopt the digital world instead of fighting against it. Not surprising, as the late acceptance or outright rejection of digital distribution has humbled former retail behemoths.

“GameStop is seeking to avoid the fate that has befallen many other specialty-media retailers that stumbled because of the Internet,” wrote the Wall Street Journal’s Nick Wingfield, “from Tower Records in music to Borders Group Inc. in books to Blockbuster Inc. in movies. Several years ago, GameStop earmarked $100 million to spend on acquisitions in the digital distribution business, a pot of money that the retailer started using in the fall of 2009 to acquire two earlier start-ups.”

“We’ve got a hybrid consumer, and we are now a hybrid company,” said Paul Raines in regards to GameStop’s plans for the future. The company seems to understand that now’s the time to start messing around with mass digital distribution in order to see what sticks, but if you still pop into a GameStop for the latest retail release, you can count on continuing to do so for some time yet.

About Nadia Oxford
Nadia is a freelance writer living in Toronto. She played her first game at four, decided games were awesome, and has maintained her position since. She writes for 1UP.com, Slide to Play, GamePro and other publications, and is About.com’s Guide to the Nintendo DS.

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