GameStop Says Free Games Devalue Growing Digital Marketplace - The UpStream

GameStop Says Free Games Devalue Growing Digital Marketplace

posted Sunday Nov 23, 2014 by Nicholas DiMeo

GameStop Says Free Games Devalue Growing Digital Marketplace

GameStop, the company notoriously known for selling used games at almost-new prices, isn't very happy that Sony and Microsoft have been giving away free games with their consoles and during other promotions. The disdain is so intense that a GameStop exec spoke on the matter during a shareholder conference call this past week.

GameStop President Tony Bartel said in the call that, "What we produce has value, and we should protect that value." The message is rooted in the notion that the PlayStation 4 and Xbox One are often bundled with free games, and in other promotions, games are given to customers for no charge. How does this impact GameStop? Well, Bartel mentioned that "over $100 million worth of games have been digitally delivered for free in hardware bundles" as the company's estimation on the free handouts. And while I understand his slight frustration at the big two, here's where things go a bit south. He went on to say that once Sony and Microsoft decide to stop giving out games for free that,

...the industry will need to work together to continue to price goods in a way that sustains profitability and encourages a great innovation that this category needs.

This is the part of the story where every gamer's jaw collectively drops to the floor. This is all coming from GameStop, the company that has been selling $60 games for $54.99 and charging another $10 for the code required to play online. GameStop, the company that has been taking that $54.99 and not giving a dime of it to developers of the games they sell, and continue to boast its success in used game sales. GameStop, the company that now offers a credit card to help customers afford those used game purchases. It's the same company that has moved customers' new game reservation money to a used game purchase, without asking the customer for permission, because it will "save the customer money." Oh, and it's also the company that is considering doing all of the above with used DLC. I'm confused, but I think all of that is the opposite of "working together," unless "working together" means all of the GameStop stores working together to push everyone else out of selling games.

Bartel closed the call by adding,

We want to help ensure that our industry does not make the same mistake as other entertainment categories by driving the perceived value of digital goods significantly below that of a physical game.

To paraphrase, GameStop is scared of the console gaming world moving to digital says. If anything, the past five years of digital sales for PC games have proven that AAA titles selling for less money than full-retail can only be a good thing. Digital platforms like Steam and Origin have shown that holding weekend-long and month-long sales where games are slashed up to 75% off only boost sales and awareness to games. The lack of push to digital and the constant need for production plants are the main reasons we're still seeing $60 games for consoles, even for the digital copy. And then you add in GameStop's never-ending efforts to cut out the developers in the "pay money to people who deserve it" process. We can probably even place some blame onto GameStop for the insane amount of microtransactions in AAA games.

The difference in what GameStop is doing versus what GameStop is mad about is the fact that game studios have actively made the decision to offer up a game for free or in a bundle. The studios speak with Microsoft and Sony to hammer out details for a promotion and how it'll all work out. It's not like the Xbox One Marketplace is marking Sunset Overdrive down to $50 and then not giving the team at Sunset Overdrive their portion of the money.

If we're going to play this game, we need to call it like it is. Sony and Microsoft are working on attracting new fans to its product by offering big-name games for free. Those two companies are the masters at sales and promotions and do a great job year in and year out at keeping the gaming industry moving forward. And, apparently, GameStop is the master at shifting the blame to everyone else when it can't cash in on a popular idea in a new market.

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