GameStop: Free-to-Play Is an Opportunity, Not a Challenge

[Logan Westbrook]

GameStop: Free-to-Play Is an Opportunity, Not a Challenge

GameStop might be known for selling games, but that doesn't mean it's not going to jump on a chance to add a whole new revenue stream.

Retailer GameStop giving away games for free might seem like a bad business idea, but that's exactly what it's going to be doing following its acquisition of free-to-play gaming website Kongregate. But Chris Petrovic and Shawn Freeman, general managers of GameStop's digital ventures group and digital business respectively, say that it's actually a fantastic opportunity for the retailer.

Petrovic says that GameStop wants to be prepared to take advantage of the changing face of the videogame industry. He said that Kongregate was unique as its audience was "core" and that there was a lot of crossover between the site and GameStop's retail customers. "We know that our customers play games outside of the living room," he said. "And that they spend time on Kongregate, and that the free-to-play business is growing - and we'll get more involved in that." He added that continuing the relationship with the customer beyond a single purchase represented one of the core focuses of GameStop's business.

Freeman agreed that there was a lot of synergy between GameStop customers and the Kongregate audience, and said that while operating a gaming portal required a very different mindset than running a retail business, he was confident that the expertise of the existing Kongregate staff would be a huge help. "While we broadly understand it, there is a lot of expertise in effectively monetizing that [free-to-play] area and gameplay we get from these acquisitions."

Having a presence in multiple aspects of the gaming world actually makes a lot of sense for GameStop, and will help insulate it as digital distribution becomes more and more popular and its traditional revenue streams start to decline. While it's unlikely to be moving away from retail any time soon, having multiple irons in the fire is a smart move for any business.

Source: MCV [http://www.mcvuk.com/features/733/INTERVIEW-GameStop]



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[Quiet Stranger]

Sooooo does this mean we're not gonna be charged to play games on Kongregate?

 

[Doctor What]

So they're going to endorse a free to play site, but still charge us out the ass, and give us nothing for used games? They need to get their priorities straight.

 

[Mezzo.]

Sooooo does this mean we're not gonna be charged to play games on Kongregate?

Well, the way Kongregate makes money is through all the ads and the game designers that bring these games to the site (at least that's what it seems like to me).

I'm sure Kongregate will stay much the same.

 

[tlozoot]

I guess they need to find a new way to make cash, what with publishers ganging up to pretty much suffocate the life out of the used games market.

 

[squid5580]

I guess they need to find a new way to make cash, what with publishers ganging up to pretty much suffocate the life out of the used games market.

Except it doesn't appear to be working. I am beginning to think it is having the opposite effect than intended. Something I have noticed quite a bit lately. When a new DLC pack comes out the game trade in value goes up. Even if the DLC came free with a project $10 (or reasonable facimile).

 

[Mordwyl]

If I have to spend one cent to play any game on Kongregate this is the last time I visited the site.

 

[theultimateend]

Well that's a pretty good reason to never use Kongregate.

I'm just adamantly opposed to GameStop, years of bad experiences caused me to one day realize "Holy crap someone invented the internet and you can get games cheaper there without the hassle."

Plus Release Day shipping means I don't need to wait outside at Midnight, the game gets brought to me.

I feel like friggen royalty. *Pats Amazon on the Head*

 

[QCX]

If i wanted to play a bunch of shitty 2d games, I'd pull out the SNES emu.

 

[SimuLord]

If i wanted to play a bunch of shitty 2d games, I'd pull out the SNES emu.

I pull out the SNES emu to play really GOOD 2D games. Why would I play the shitty ones when there's FF6/Chrono Trigger/Secret of Mana/Aerobiz Supersonic/Uncharted Waters 2...

 

[Direwolf750]

If i wanted to play a bunch of shitty 2d games, I'd pull out the SNES emu.

Don't kid yourself. You can find shitty 2D games on almost ANY system.

I'm still kinda sad about this...I don't quite like the idea that gamestop is taking over Kongregate...especially if they decide to add stupid features like "view-this-add-to-play-any-game" sort of shit. Wouldn't put it past em.

 

[Jared]

That does surprise me, thought they would beright in there with the likes to squeezing every last penny outta people!

 

[JeanLuc761]

So they're going to endorse a free to play site, but still charge us out the ass, and give us nothing for used games? They need to get their priorities straight.

Gamestop is a business, which seems to be something a lot of people have a hard time remembering. Used games are their primary revenue stream while new titles have most of the profits sent to the publisher/developer.

Besides, trading in a game, regardless of how much they give back, is money you didn't have before. Does anyone really think it would be a good financial decision for Gamestop to give back $45 on a new $60 game?

It is not Gamestop's obligation to give you more for the game. YOU take the chance by trading the games in, YOU know what you're getting. If you don't like the price, then take the games home and find somewhere to sell them. Period.

 

[KEM10]

So they're going to endorse a free to play site, but still charge us out the ass, and give us nothing for used games? They need to get their priorities straight.

Gamestop is a business, which seems to be something a lot of people have a hard time remembering. Used games are their primary revenue stream while new titles have most of the profits sent to the publisher/developer.

Besides, trading in a game, regardless of how much they give back, is money you didn't have before. Does anyone really think it would be a good financial decision for Gamestop to give back $45 on a new $60 game?

It is not Gamestop's obligation to give you more for the game. YOU take the chance by trading the games in, YOU know what you're getting. If you don't like the price, then take the games home and find somewhere to sell them. Period.

*clap clap clap*

The one problem is that most of the used retail stores that are doing well are all online. GameStop has the misfortune of brick an mortar so it needs more money to keep running. Hell, I use Glyde for all my used games or DVDs (unless there is a Blockbuster going out of business near me) and their prices make GameStop's look completely ridiculous. But it's not because they are trying to rip me off, GameStop has to pay for rent of the building, all of the employees, free giveaways to keep people devoted to them, and advertising. Obviously an online retailer that acts as a go between will earn more money and can afford to sell everything for less.

I wouldn't be surprised if GameStop goes out of business, or at least abandon their physical locations, in the next few years. It's just because we are on the cusp of a new marketing frontier. Online is more powerful, faster, and cheaper than anything else. The only bonus you get from the store is the now feature, and most people don't have any issue waiting the week to save the $15.

 

[GodKlown]

I can probably see this as the first serious step that GameStop is going to make as an online distributor to get away from building any more stores, if not closing existing ones. They might start to monitor the traffic the site gets once they take it over, and while I can't really foresee a subscription fee for Kongregate (after all, there are plenty of other free flash game sites on the web), I can understand this to be a potential foothold for GS to get their feet wet in trying to strictly sell digital downloads of games.

Perhaps in the future you could see an app for XBL or PSN to allow you to buy games from GS via Kongregate or directly through them for consoles. Food for thought.