The doors to the GameStop Expo 2014 in Anaheim, California.
Sam Machkovech
Last week at the third annual GameStop Expo, executives from the nation’s largest game-focused retailer met Ars behind the expo floor of playable game kiosks to lay out their plans for a life — and income — beyond physical video game sales. . As gamers begin to settle into a brave new world of downloadable, triple-A games, GameStop has responded with the recent acquisition of non-gaming, hardware-focused companies Simply Mac, Spring Mobile, and Cricket Wireless.
That’s not to say the company is gearing up for an imminent departure from the gaming space; between sales of DLC cards, next-generation hardware, and a 2013 victory over the threat of single-use codes, GameStop still has enough physical product to pull into its 4,400 U.S. stores. But our conversations with multiple GameStop executives revealed a somewhat surprising desire: to start buying and selling used downloadable content.
“Frankly, one of the questions the industry will have to answer going forward [this]: ‘Is the value of a digital game worth less than the value of a physical game?'” Executive Vice President Mike Hogan told Ars. time, but maybe in the future – there’s less resale value.”
After hearing that, we took the opportunity to highlight to Hogan if GameStop was specifically interested in extending its successful buy-sell-trade model from physical games to used digital content. Currently, downloadable games and content are typically licensed to users on marketplaces such as Steam, Xbox Live, and PlayStation Network and cannot be openly transferred after use.
“It would require a partnership between retailers and publishers, but it could definitely go that way,” Hogan said. “We are definitely interested in pursuing that. There are many examples where people have taken digital content and made it portable from one consumer to another. World of Warcraft [and its third-party item sales]. There’s no fundamental or technological reason why that couldn’t happen [on other platforms]. If the consumer wants it, and it provides value, we think it will happen over time. Consumers will speak for that.”
A war between physical and digital?
GameStop Senior Vice President of Pre-owned Business Jason Cochran echoed the same hope. “[There’s] potential to continue to work with our vendor partners, publishers and even developers on what that would mean playing in that space — how we can continue to make the value of digital content tangible to our consumers so they can stay in the game, enjoy more gameplay and actually buy more titles and more IP,” Cochran said. “The possibilities are endless how we can leverage our buy/sell/trade model and continue to give our customers what they want.”
As of now, GameStop’s partnership with every major digital download retailer revolves primarily around selling codes that can be redeemed for store currency, subscription services, and specific downloads. Steam was the most recent of the storefronts to have fun with GameStop, starting in 2012.
“A lot of people would have said that digital and physical are going to be at war with each other,” Hogan said of that partnership. “We found a solution that said Steam is going to do what they really do best, which is making games on the Valve side, and running this marketplace on the Steam side. We’re going to do what we really do best. being, that’s discovery, curation and customer acquisition. We bring that value to Steam.”
When asked if that gives hope of working with Steam on a used sales model for downloaded games, Hogan answered very affirmatively. “We’re having that exact conversation with a lot of people. With Microsoft, Sony, et cetera. Make no mistake, GameStop is very optimistic about digital gaming. We don’t see it as a threat to us; we see it as an opportunity.”
As of now, GameStop has no model for publishing games other than Kongregate, a web-based, free gambling portal, but Hogan took the opportunity to hint that games would eventually be published directly through the company as well.
“If GameStop is already going to account for the majority of units of a game that gets published anyway, are there many games that the world otherwise wouldn’t see because they can’t raise the capital it takes to develop and publish a console game today? ” Hogan said. “If you could use the power of GameStop for that… We’re not going to be game developers, but what we’re really good at is the consumer side of it. Making the market for it, acquiring consumers, helping consumers find the right game at the right time, which frankly becomes more and more difficult in a digital world.”
Hogan also repeatedly pointed out GameStop’s PowerUp Rewards program, which currently has over 29 million users. “All that data?” Hogan said. “That didn’t exist five years ago. We made that. The value of that in a digital world is huge. Every game publisher has only a small perspective on people who play games, they don’t see the whole piece. There are many ways where we can add value in the digital world.”
License to license
Representatives from Sony’s PlayStation division declined to comment on GameStop’s position, while Microsoft’s Xbox division offered the following statement: “When a game is purchased digitally, the license for that game is tied to the user who purchased it. There is currently no option for that user to relinquish the license and sell or give it to another user or intermediary. We believe in digital distribution on Xbox and pride ourselves on offering gamers a variety of ways to offer to purchase and experience their games, but we have nothing to share about the potential of DLC trading and reselling at this time.”
However, GameStop chose its words carefully, tiptoeing around marketplaces’ policies on licensed content and never directly referring to it. Instead, it likened its plans to selling digital items that have been happening in major online games for years. That’s sneaky semantic stuff on their part, and it puts the ball in Microsoft, Sony, and Valve’s court. It’s in GameStop’s interest to get fans excited about the resale value of gamers’ purchases – evidenced by debates over used game support for the PlayStation 4 and Xbox One – and there’s a lot of money to be made from players who would trade in their digital content to purchase discs, or vice versa.
The companies that maintain digital storefronts probably aren’t eager for GameStop to show up and take a percentage of the cost for DLC and digital game transfer. But for now, GameStop can certainly look like the good guy in consumer eyes for advocating the option on behalf of players.