How will gamers buy games?
GameStop announced delicious earnings growth this morning. During the darkest economic times in a generation, they also announced their intention to open eight new stores every week in 2009.
Wait, aren’t we in a global depression? What is happening? A number of things:
- Games have momentum. No longer the domain of kids, games’ appeal has become nearly universal, especially among men. And like other forms of entertainment, game producers have created titles for particular demographics.
- Games are value purchases in bad times. Even at sixty bucks for a new title, a good game can provide months of entertainment value. I’ve put something close to 60 hours into Grand Theft Auto IV, and I just discovered multiplayer a couple weeks ago. And the more one plays games, the more boring passive entertainment (like TV) seems.
- Games are resellable. This is where GameStop gets its mojo. Walmart and Target may have killed Toys R Us and other monoline-type retailers, but GameStop has the resale business. Game producers hate resales because they cannibalize new sales, but many full-price purchases are undoubtedly influenced by the potential of a future resale.
But why should a purely digital medium require a retail presence at all? Might GameStop be the next Sam Goody?
Definitely. Even as GameStop installs more cash registers, game producers are selling directly to the people, whether via SAAS-models like Xbox Live, downloadable content like GTA’s new “episode” The Lost and the Damned, or add-ons like Rock Band tracks or virtual gifts.
As Darren Gladstone mentions in PC World, even against GameStop’s success, games’ dependence on retail seems fleeting. Why?
- Stronger independently-produced games
- More online games
- Downloadable content replacing sequels
- Flexible pricing schemes
But the main reason why GameStop, and most games retailers, are doomed is that they provide little value to the broadband-enabled customer. Ever been in one? Most are just a few promo displays, a couple maybe-functional demo consoles, and walls and bins of empty boxes. You can’t try the game out; you can’t even see what it looks like.
GameStop does provide a resale channel, which is something that isn’t a (legal) option in the download era. But iTunes aren’t resellable, either. Game producers will defeat resales with convenience and pricing.
In 10 years, we’ll marvel at the days we brought home an object in a box to watch, listen, or play. In the meantime, GameStop has a load of money to make. For a little while.