Mobile and Online Games Threaten Gamestop's Bottom Line

[Steven Bogos]

Mobile and Online Games Threaten Gamestop's Bottom Line

Gamestop is trying to figure out how to integrate these new forms of gaming into its business structure.

Gamestop, one of the major brick-and-mortar retailers of videogames is little by little fading into the night, and fighting desperately against the new ways we play and purchase games to avoid slipping into redundancy. Mobile and online games specifically, which simply cannot be sold in a physical store, are the biggest threat to the company's bottom line, according to a recent financial filing.

"Browser, mobile and social gaming is accessed through hardware other than the consoles and traditional hand-held video game devices we currently sell. If we are unable to respond to this growth in popularity of browser, mobile and social games and transition our business to take advantage of these new forms of gaming, our financial position and results of operations could suffer," the filing said.

Gamestop is currently looking for ways to integrate mobile and online games into its current business structure. "The company has been and is currently pursuing various strategies to integrate these new forms of gaming into the company's business model, but we can provide no assurances that these strategies will be successful or profitable."

The filing claims that the popularity of browser, mobile and social gaming has increased greatly and this popularity is expected to continue to grow. This is pretty obvious to anyone who has been watching the way videogames evolve, with mobile hits like Angry Birds and free-to-play success stories like Team Fortress 2 dominating a large portion of the gaming landscape.

The document also stressed the importance that Gamestop has with hardware manufacturers such as Sony and Nintendo, offering a breakdown of its biggest partners. "Our largest vendors worldwide are Sony, Activision, Nintendo, Microsoft and Electronic Arts, which accounted for 17 per cent, 16 per cent, 14 per cent, 13 per cent and 11 per cent, respectively, of our new product purchases in fiscal 2012."

Gamestop, which was recently voted the $269.7 million in fiscal 2012. [http://www.escapistmagazine.com/news/view/119020-Gamestop-Makes-the-Worst-to-Work-For-List] Is this inititive a case of too-little-too late? Do we even Gamestop anymore? What's the point of a brick-and-mortar store when online sites like Amazon, or digital download outlets like Steam or the Playstation Store can offer a better service at a cheaper price?

Source: Gamesindustry.biz [http://www.gamesindustry.biz/articles/2013-04-04-gamestop-names-mobile-and-online-gaming-as-threat]

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[Harker067]

Probably treat their employees better then online retailers do.

http://www.motherjones.com/politics/2012/02/mac-mcclelland-free-online-shipping-warehouses-labor

"...every time a "Place Order" button rings, a poor person takes four Advil and gets told they suck at their job."

 

[kajinking]

I was guessing these guys were REALLY glad the new consoles were on the way, but now that it's been brought up I realize that with Amazon and all these other online shopping sites even that might not be enough

 

[Doom972]

Non-union jobs,
Non-union jobs EVERYWHERE!

Is this inititive a case of too-little-too late? Do we even Gamestop anymore? What's the point of a brick-and-mortar store when online sites like Amazon, or digital download outlets like Steam or the Playstation Store can offer a better service at a cheaper price?

Justifying the existence of AAA publishers?

That's right. On Steam, for example, great indie games get the same exposure as AAA games. It might encourage more developers to stay/go indie, and reduce the power publishers have on the industry.

Once physical media isn't used, are publishers even necessary? Might as well just find some investors instead, since you don't need a large company to handle the creation and distribution of game copies.

 

[Beautiful End]

Eh good, Gamestop are douchebags anyway.

I get really really annoyed when they try to talk me out of buying new games and buying one of their used games instead...

B-but that's how they threaten us to keep our job! D:

No, seriously. We're told to push reservations, subscriptions and used game sales all the time. They review your sales at the end of the week and if you did it successfully, you get more hours to work and therefore, more money. If you do not push sales, like me, you don't get any hours at all, even if you're always polite and on time and the best worker ever.
Like me.

Believe me, I used to hate it too when they tried to force a sale on me. But now, whenever I walk into another GS and someone tries to force me to buy something, all I see is a poor employee worried about his/her next paycheck.

 

[Senare]

Once physical media isn't used, are publishers even necessary? Might as well just find some investors instead, since you don't need a large company to handle the creation and distribution of game copies.

True and nice, though marketing is supposed to be insanely important for games to be successful. Marketing expenses in and of itself could become enough to warrant publishers.

 

[Doom972]

Once physical media isn't used, are publishers even necessary? Might as well just find some investors instead, since you don't need a large company to handle the creation and distribution of game copies.

True and nice, though marketing is supposed to be insanely important for games to be successful. Marketing expenses in and of itself could become enough to warrant publishers.

Even in a digital environment? I discovered many indie games by just seeing them on the main page of the Steam store - and nowhere else. They always show new games on the main page.

 

[Senare]

Once physical media isn't used, are publishers even necessary? Might as well just find some investors instead, since you don't need a large company to handle the creation and distribution of game copies.

True and nice, though marketing is supposed to be insanely important for games to be successful. Marketing expenses in and of itself could become enough to warrant publishers.

Even in a digital environment? I discovered many indie games by just seeing them on the main page of the Steam store - and nowhere else. They always show new games on the main page.

It mystifies me too. These are not my own beliefs and I think they are referring to marketing towards the mass market. No matter of the coverage your game gets on Steam only those who use Steam from time to time will have a chance noticing it. Yet almost every American seems to be watching the Super Bowl, which would account for a lot of purchases.

 

[Doom972]

Once physical media isn't used, are publishers even necessary? Might as well just find some investors instead, since you don't need a large company to handle the creation and distribution of game copies.

True and nice, though marketing is supposed to be insanely important for games to be successful. Marketing expenses in and of itself could become enough to warrant publishers.

Even in a digital environment? I discovered many indie games by just seeing them on the main page of the Steam store - and nowhere else. They always show new games on the main page.

It mystifies me too. These are not my own beliefs and I think they are referring to marketing towards the mass market. No matter of the coverage your game gets on Steam only those who use Steam from time to time will have a chance noticing it. Yet almost every American seems to be watching the Super Bowl, which would account for a lot of purchases.

True, but imagine that you would have to get your games on a digital service (Steam, XBL, PSN, etc.). If you log in there on a daily basis, you'll be able to see what new games are available on each day, if they make a list of the newest releases with brief information about them in the main page. It'll be on your screen anyway, so why waste money on a Superbowl ad?

 

[Owyn_Merrilin]

*Sigh* Why does nobody ever mention Gamestop Downloads? It's one of the better DD platforms, mainly because it's Impulse with a new skin, lower prices, and a lot more titles, because Gamestop is better at negotiating with the publishers than Stardock was.

Heck, it's not even impossible to sell digitally distributed games in a brick and mortar store. If you can find a gamestop with a half decent PC selection (not always easy), they usually have a shelf with display cases for their DD games, which they'll gladly sell you a code for (at what I think are slightly cheaper rates than the boxed copies) in the store. I don't know too much about how it works, mainly because their app is already on my computer (I've had the program since Stardock was running things), so if I want to buy something digitally from them, I'll just do it that way. You tend to get better prices that way anyway, since the sales, as far as I know, don't apply to codes they sell in brick and mortar stores.

 

[Stormwaltz]

(leaving)

 

[PoolCleaningRobot]

I'm not into used stuff but if gamestop goes out of business I'd imagine it would be a pain to buy any used hardware. You would only be able to go pawn shops or a buy backs or something and Gamestop tests all their used stuff and will replace anything that's defective. I highly doubt Joe's pawn shop care if they sell you a broken device

 

[inkheart_artist]

What's with all the doomsaying? it's a 7% loss, the year prior they had 340 million in growth. Sure, the loss is not a good thing but it's definitely not so bad that initiatives to bolster sales the next quarter could be construed as 'too little too late'. Hell, Sears and Best Buy have been posting worse yearly losses year after year for quite some time and Sears actually managed to grow last quarter.

 

[Colt47]

I'm hoping they stay afloat because they tend to stock games that other places like Target refuse to. They also have used ps2 games, which kind of helps since I still find myself gravitating to that old buddy of mine.

 

[Requia]

I want them to stay afloat because they have all the money and incentive necessary to fight back against the war on consumers (since without right of first sale they are completely fucked).

 

[Pebkio]

This is news? Really? Games that subvert physical media are hurting physical stores? This is like reporting that a loaf of bread goes hard if you leave it out on the counter. Or that a person who's been underwater for too long is starting to drown

The second bit is reporting that the drowning person is trying to swim up for air. Maybe also searching for another swimmer who might help.

 

[Norix596]

Well the bottom line is they CAN'T. By very fundamental nature of the browser game and mobile game markets, a dedicated physical retailer is not part of the equation for the purchase. What they CAN do is shift for to merchandise. Having a much bigger stock of gift cards for more services platform and games. Or even have game specific coupons possibly. An aunt could buy a nephew a card based ID code that's a coupon for angry Birds, or a certain amount of resources for Farmville. They can also ramp up their strategy guide sales and sell more tie-in merchandise like Dragon Age plushies, Angry Birds T-shirts and stuff like that. They also might want to scale up their - come in and try a game services because getting people in the door is a big part of making a sale.

 

[nickpy]

What's the point of a brick-and-mortar store when online sites like Amazon, or digital download outlets like Steam or the Playstation Store can offer a better service at a cheaper price?

Maybe it's different in Gamestop / America, but in my experience, online stores are almost universally more expensive than buying from a shop, not to mention slower. For a large game (e.g. 3+ gigs) I actually find it quicker to drive a few miles to the local game shops and buy the game there, come home and install it, than to wait for Steam or w/e to take forever and a half to download it - and I have fast broadband and regularly achieve download speeds of 1Meg a second plus!

So yes, I really, REALLY don't get people saying this: "Online stores are cheaper and more convenient" when I usually find the exact opposite - they're slower and more expensive.