GameStop: Digital distribution is not a threat

Written by Joe Martin

June 22, 2009 | 13:01

Tags: #digital #greenhouse #impulse #price-cuts #ps3 #wii

Companies: #game #gamersgate #gamestop #steam

US retail chain GameStop claims that it isn't worried about digital distribution systems like Steam, Impulse or Greenhouse and that such services can't rival bricks and mortar stores. The comments came in an analyst note from Sterne Agee's Arvind Bhati, according to Gamasutra.

In the same statement GameStop also said that it was expecting major price cuts for both the PlayStation 3 and the Nintendo Wii in the near future - probably before Christmas.

"Management believes that a meaningful PS3 cut is highly likely in the near-term," claimed Bhatia, who went on to indicate that the price cut may be as large as a $100 USD discount to coincide with the launch of Madden NFL 10 in August - something that'll probably please Activision no end.

GameStop claims to have done an in-depth study on services like Steam and said that a solid market for digital distribution will not exist until 2014 and that even then only a quarter of the population will have the technology to access full games.

GameStop also believes that a number of issues, including spiralling costs and the niche nature of the market, will prevent digital distribution from becoming a threat in the short term.

Bhatia said that there won't be a huge push to pursue digital distribution on the behalf of publishers either, with many customers having an expectation that digital copies should come at a lower price - something that won't exactly encourage publisher interest. Of course, that seems to be skipping over the idea that if a game is being published digitally then there may not be a need for developers to sign with a large publisher anyway...

As for whether or not the market exists or not, while it's understandable that a large proportion of GameStop's audience is in a demographic that won't be aware of or specifically targeted by services such as Steam, that view could be ignoring the growing number of gamers who turn to digital services they trust before resorting to normal stores. With major publishers like Electronic Arts launching there own store and with Microsoft about to roll out a digital-only storefront for the Xbox 360 it seems like GameStop may be in the minority who think that digital distribution isn't going to take off.

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