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Op Ed

IndustryGamers - GameStop 'Struggling' to Avoid Becoming 'The Next Blockbuster'. By GamersGate CEO Theo Bergquist.
GameStop has been struggling to redefine the company. While it is still the dominant force in traditional video-game retail, the firm is certainly aware of the trend away from OEM purchases for console games. With almost every comparable industry becoming digital (TV, movies, music, books) and Steam becoming the powerful player in interactive entertainment in its own right, it certainly seems absolutely necessary for GameStop to aggressively enter this space. As GameStop puts it in their press release, “GameStop doesn't care how you get your games; it just wants to be the company that gets them to you”, or to paraphrase “we will do whatever we can to not be the next Blockbuster.”

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13. Re: Op Ed Apr 7, 2011, 10:47 Ant
 
HIGH_PING wrote on Apr 7, 2011, 00:06:
I received a $20 gamestop gift card many years ago. I still have it and have yet to use it because the prices at Gamestop for PC games are way too high. Even old games are almost retail price there.
Do they expire? I haven't gone to GameStop to buy games since EB days.
 
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12. Re: Op Ed Apr 7, 2011, 09:17 Beamer
 
Gamestop primarily sells games and Blockbuster primarily rented movies. These are two entirely different business models.

But, from an industry standpoint, there's a huge difference.
Blockbuster built itself up at a time when renting was the ONLY option. Movies cost $80+ and no one was going to pay that. Blockbuster was beloved by studios because it bought so many of their tapes. DVDs became dirt cheap and changed that, making people more likely to buy (why rent for $5 when you can buy for $7-12?) and making studios more interested in selling over renting. There still remained a pretty solid relationship between the two, though, as it was at least another revenue stream, even if a smaller one: Blockbuster buying DVDs still made sure DVDs got sold prior to the movie going on to cable and then networks, and stronger rental stats would help the studio sell broadcast rights for more.


GameStop pissed where it ate, so to speak. Game customers are more accustomed to buying instead of renting, so that revenue stream would always be there and games are budgeted expecting that. But GameStop moved primarily into selling used games. They'd undercut new prices by $5, which was less than 10% of a new game and they'd cannibalize new game sales. Studios got less, customers got slightly more, GameStop got significantly more. Studios were pissed off, and rightfully, that they lost such a huge chunk to a parasite.

So while they're two different business models, they're similarly hurting.
Plus why would anyone buy from GameStop used when you can typically get the same price from Amazon new?
 
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11. Re: Op Ed Apr 7, 2011, 03:54 mag
 
Gamestop is not in the business of selling games. They are in the business of selling used games.  
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10. Re: Op Ed Apr 7, 2011, 00:06 HIGH_PING
 
I received a $20 gamestop gift card many years ago. I still have it and have yet to use it because the prices at Gamestop for PC games are way too high. Even old games are almost retail price there.  
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9. Re: Op Ed Apr 6, 2011, 19:36 Golwar
 
I have no idea how GameStop should be able to avoid said fate. Sure, they can get into the digital business with Impulse and that other OnLive-like stuff. But the consoles are a closed system and I highly doubt that they can be more than a second rank contender on the PC market.  
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8. Re: Op Ed Apr 6, 2011, 14:39 Creston
 
That press release is overly wordy. It would have been far more apt, and economical, to write it as thus: "Gamestop doesn't care. Period."

While it would suck for all the kids that work there, Gamestop is long overdue some aggressive bankruptcy.

Creston
 
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7. Re: Op Ed Apr 6, 2011, 14:18 killer_roach
 
So if GameStop is becoming the next Blockbuster, does that mean the GameStop of 2020 might get bought out by Dish Network as well?  
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6. Re: Op Ed Apr 6, 2011, 13:04 Verno
 
I can download most of the console games I want right from the console.

Maybe the ones you individually want but I doubt their respective stores are even at 20% of their overall catalog offerings. They are certainly being built up however.
 
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5. Re: Op Ed Apr 6, 2011, 13:01 Steele Johnson
 
What are you talking about? I can download most of the console games I want right from the console. Microsoft, Sony, and Nintendo are building up their online stores as we speak. It has nothing to do with Steam.

It's a lot like the Blockbuster scenario. You either drive to the store and pay for an overpriced game, or you download it to your console in the background without having to drive anywhere.
 
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4. Re: Op Ed Apr 6, 2011, 12:12 Kajetan
 
Hyatus wrote on Apr 6, 2011, 12:06:
Gamestop primarily sells games and Blockbuster primarily rented movies. These are two entirely different business models.
True, but Gamestop aquisition of Impulse shows that Gamestop sees the risks of Retail, when digital delivery is growing so strong. And even if Retail stays an important sales channel, there is no harm in making additional money with downloads on the PC and possibly in the future with consoles.
 
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3. Re: Op Ed Apr 6, 2011, 12:06 Hyatus
 
Gamestop primarily sells games and Blockbuster primarily rented movies. These are two entirely different business models.

Blockbuster failed because their prices were high and there was a better competitor out there(Netflix).

There isn't a worthy competitor to Gamestop yet. I would rather wait a year and buy a game for $20 used than spend $10 or more on rentals.

As long as games are still sold at retail, Gamestop will still be in business. Sure, Steam might win the console crown someday, but we're not even close, yet.
 
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2. Re: Op Ed Apr 6, 2011, 11:55 avianflu
 
a rare article from "industrygamers" that actually nails it on the head.

Gaming of all sorts is going digital because the publishers want it that way (more profits and copy protection) so Gamestop will indeed have to scramble now, or lose.
 
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1. Re: Op Ed Apr 6, 2011, 10:21 Verno
 
They took their business model to the extreme and directly threatened the industry they were supported by. I can't summon any sympathy for Gamestop, I feel bad for the consumer who is caught in the middle. Unfortunately even they share some of the blame too, there are no winners or victims in this situation.  
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