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Gamstop CEO Paul Raines gave an interview to investment site The Street today where he described the shift in retail gaming from the physical to the digital and how it applies to the Gamestop business model. Whats interesting here is that what he's describing is not really a download model but, rather, an online rental model of the likes that Netflix and, more importantly, GamyFly utilizes.
Raines: We are looking at other successful multi-channel stories like Netflix(NFLX). The technology is clear -- what's not clear is the chronology. We are getting a good picture of how to balance digital and physical content. We have studied Netflix a lot, and most of their users still absorb physical content rather than streaming. Now we are looking to see how gaming compares. We are focusing on consumer acceptance. The world won't be all digital tomorrow, even though that's what people are claiming. In this business, users still want physical content.
I don't know about you, but GameFly has been a lifesaver for those of us who's job it is to play, and write about, as many games as possible. All the while getting paid as little as possible. If Gamestop wants to get into the business then a little competition is always good for prices as far as the consumer is concerned. I also really appreciate Paul Raines' slight push-back on the "all-digital" gaming model that some companies seem to be pushing. He seems to understand whats going on, he's a smart man...you should listen to him. Hell, he can come over to my place and fuck my sister.
The foundation of the article is also important. Why is an investment website talking to Paul Raines all of a sudden? Gaming purchases as a whole dropped 6% last month and everyone in the gaming retail industry is currently freaking the fuck out over the fact, and now looking for all sorts of scapegoats to pin the problem on. Of course it might have something to do with the fact that nothing really good, or nothing marketed well, was released last month.
But no, we need a SACRIFICE, so online digital distribution and rental seems to be the current goat being brought to the slaughters. Never mind that only a few months ago people were blaming Gamestop's used games sales for the same thing.
Stay tuned when next month's further decline of video game sales gets blamed on Adult Swim's Flash games website.
-Joseph-
Comments
14 years, 11 months ago
hyperlink is broken.
14 years, 11 months ago
Rent the movie on Netflix, then rent the video game from Gamestop XD
14 years, 11 months ago
Hopefully this will happen and nice description of how we should trust him lol.
14 years, 11 months ago
yeahhh to be honest, if gamestop rented out games it would prolly be the worst service ever. gamestop has a terrible service record just for selling and buying back games. they sell expensive and buy back for cheap... i would only imagine their rental system would be just as scam worthy
14 years, 11 months ago
I would imagine game sales dropped from last month because, well, it's summer as well.
A better indicator would be gaming purchases this month as compared to the same time last year. And then, there are also the factors you mentioned.
14 years, 11 months ago
It didn't really seem like a suggestion that he is considering renting games but an example of why he thinks retail (read: Gamestop's business) is here to stay for the moment. His example of Netflix is why he thinks consumers still value physical media versus digital and how he believes the transition to digital isn't as clear or sudden. Also, software sales have been dropping all this year, so yeah, it is something retailers would be worried about, it isn't just a one month thing.
14 years, 11 months ago
its only a mtter of time until one of these Consoles start making it where the game you buy is YOUR GAME: no trading/lending it to friends...only a matter of time...Dawn is upon us...*closes blinds*
14 years, 11 months ago
I like the idea GameStop doing a rental service. One of Gamefly's biggest weaknesses is that they only have a few distribution centers serving the entire US. However, if I had a subscription to GameStop's service, I could get a new game immediately by returning what I have to one of the two Gamestops in my town, and they would probably have more new releases in stock.
14 years, 11 months ago
Joseph I love your posts lol. But you are right, this should be pretty interesting to see how this all turns out. Though I bet Gamefly is gonna throw a shit storm over this if Gamestop opens up the service.
14 years, 11 months ago
it's to bad they couldn't do this two years ago. Now that i have gamefly
14 years, 11 months ago
If the price is right for a reasonable amount of days to rent it, this would be a god send. I just recently lost my only good movie/game rental store (Hollywood video) in my town and I would have to drive a half hour into the next town for a shitty Blockbuster. I am not sure I am ready to commit to a monthly fee for gamefly either. What with playing wow also..
14 years, 11 months ago
it would be interesting to have a rent system with gamestop. maybe pay a flat fee per month for as many games as you wish, and you can go to the story to exchange games whenever or mail it in.
and like you said, competition would be good for costomers. me personally, if gamestop had that style i said in the first part, i'd gladly pick them over gamefly, though i will be living 15 minutes away from one in time.
14 years, 11 months ago
I think that Gamestop could actually do it. They are well know, more then Gamefly. They have major profit from selling games, so they would be able to easily advertise there new rental service. The also basically can somehow rip off the customer like they usually do with their used games. For example, i saw fallout 3 for 55.99 used and the same exact game NEW for 59.99.
14 years, 11 months ago
I think this sounds fairly interesting considering my primary source of game rentals went out of business 2 months ago. I'd be much more interested in in-store rentals than mail-in rentals though.
14 years, 11 months ago
I'm confused does this mean gamestop may only be renting or will renting games just be an added option.
14 years, 11 months ago
Probably another factor why sales dropped is because everyone is just broke from buying games the last 8-10 months.
14 years, 11 months ago
[...] ways to get into the world of digital game distribution. At the time it seemed that, or at least I thought, perhaps rentals were in their future. Seems that GameStop was searching for something of a more [...]
14 years, 2 months ago
[...] in July 2010 I wrote that it appeared Gamestop was making moves to position at least part of their business on the [...]