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GameStop CEO details progress of vintage game sale initiative
GameStop CEO J. Paul Raines provided more detail on the company's new vintage games initiative in an interview with Joystiq, speaking to us about why the company wants to pursue this avenue at all, and how existing GameStop property and sites can be appropriated for this purpose.The plan to sell classic games online remains tentative, but is in progress with GameStop's "dotcom team" – a team that Raines suggested would "kill me if I start giving you an ETA, because they won't be able to surprise the world with their announcement.""We've thought about this vintage thing as an online initiative, and that's where we're doing most of our work," Raines said. "Part of what we have to do is we have to go source a lot of this product, get customers to trade some of their old product with us, and go find some old consoles, but we also own a lot of old product."
GameStop streaming service to include demos, possibly extra games tailored to players' interests
GameStop acquired Spawn Labs in 2011, planning to use that company's streaming gameplay technology for its own streaming service. GameStop has recently adjusted its plans to include PCs, tablets, and smart TVs only, even after announcing the technology for a larger variety of devices. That decision is motivated, in part, by the upcoming console generation change, CEO J. Paul Raines told me."Some things are happening in the gaming business that we're now having to adjust to," Raines said. "One of those is we're moving to a new generation of consoles. So what was our old console based technology now has to change for the new generation of consoles. So that's giving us some challenges on the technology side."
GameStop interested in Ouya
"We will be a part of any console launch in the future," GameStop CEO J. Paul Raines told Joystiq this morning, when asked about GameStop's interest in stocking the Ouya console.Though he was clear to note that the company did not have an official announcement regarding any potential plans to carry the Android console, Raines was positive about the device. "We think Ouya's cool. We love the idea of open-source components. Everything we've read is great."Raines related the new console to the Google Nexus 7 tablet that GameStop sells – and that Raines turned on during our conversation in order to remember a game he wanted to talk about (It was Dead Trigger.) "Here's the exciting thing that's happening: if you look at the power of the processor like the Tegra 3 or the x86 stuff that's coming on Windows tablets, you've got a processor now and graphics capability that are really exciting," he said."There will be games developed for that stuff. So you're going to see more of these open source type products, and we will be right in the middle of all of it."
Former EA, Activision exec Kathy Vrabeck joins GameStop board of directors
GameStop has announced that executive Kathy Vrabeck is joining its board of directors this week. Vrabeck is a former executive at both EA and Activision, served as the head of digital at Legendary Pictures, and currently serves as a partner at LA-based leadership consulting firm Heidrick and Struggles.Her appointment brings the total number of board members at GameStop to 12.
GameStop details a bright (profitable) future with DLC
During today's presentations at the 18th Annual BMO Capital Markets Digital Entertainment Conference, GameStop head chairman Dan DeMatteo (alongside CEO Paul Raines, CFO Robert Lloyd, and investor relations director Matt Hodges) spoke to the future of the top video game retailer in North America. After detailing cannibalistic markets (terrifying!) and market share (isn't business about taking, not sharing?) for 25 minutes, the crew finally got to the Q & A session, where one audience member stood up and asked DeMatteo to clarify GameStop's DLC distribution agreements with Microsoft and Sony. "I won't get into the details of the agreements, but obviously we get paid for selling the digital content. We get paid less than what we would get paid for a typical new game [retail game], because we don't have inventory carrying costs, shipping costs, etc. But needless to say, we believe it will bring operating margins similar to new games," he responded, indicating a perhaps unsurprising low return on in-store DLC sales. Still, DeMatteo sees good reason for continued sales of digital content. "We see it as additive. It's additive for us. It's additive for Sony, for Microsoft, and it's additive to the publisher. The amount of add-on content now being developed for the big games is just phenomenal. You got a new level coming out for Halo: Reach in December, we have new Call of Duty map packs coming after launch, etc. We look at our ability to sell that to the original consumer -- given that we know who bought the original copy -- to be extremely strong," he explained, referring to his company's ability to track individual customer's purchases via the Power Up Rewards card. And in the coming years, GameStop intends on becoming a much larger player in the digital realm. We expect to have market share of DLC much like we have market share of boxed product," he assured attendees.
Gamestop acquiring Flash game portal Kongregate
GameStop just took a huge step into the casual online gaming market, by agreeing to purchase the Flash game portal Kongregate. According to the announcement, the site will remain under the management of founders Jim and Emily Greer following the purchase, which should finalize on August 1. CEO J. Paul Raines explained the move, saying, "Dolphin Olympics 2 is really, really wonderful." Okay, we made that up (though Dolphin Olympics 2 is really, really wonderful). Raines actually said, "Kongregate advances GameStop's digital strategy by providing a gaming platform for casual, mobile and browser games that can be promoted and played by our existing gamers. We welcome the Kongregate team to the GameStop family." GameStop has previously experimented with free-to-play online gaming with initiatives including the Legends of Zork browser game and a small "Free2Play" portal on its retail site.
GameStop CEO: 'Users still want physical content'
While bullish on the subject of our impending digital future, GameStop CEO J. Paul Raines isn't totally blind to the new options available to consumers purchasing games. "The world won't be all digital tomorrow," he told TheStreet.com in a recent interview, "even though that's what people are claiming. In this business, users still want physical content." He does, however, offer up one initiative that GameStop has loosely detailed in the past: a new in-store download option, spawning from a partnership with Microsoft. "The strategy is to be a multi-channel aggregator for gaming. We want to be the destination for gamers, whether they are getting content via online, mobile, console or any other platform," he added, also championing the still nascent rewards card program as helping to keep customers returning to stores into the future. And just as Raines isn't worried about the disappearance of brick and mortar stores, he's similarly unphased by the competition in the used games space. "There is competition out there that likes to dabble in this segment, but I'd like to remind people that we have seen this many times before. Both Walmart and Best Buy have launched and canceled programs [TheStreet points out that Best Buy is still in the used games business]." But with the relatively dramatic increase in digital distribution over the past few years and enormous hard drives connected to most of our consoles (and even handhelds), not to mention a recent NPD report indicating a closing disparity gap between retail and digitally distributed PC games, we have to imagine that the company's digital efforts are expected sooner rather than later. If it will be soon enough remains to be seen.
GameStop appoints new CEO, promotes several executives
Gamestop seems to have decided that all of its executives needed promotions. Former CEO Dan DeMatteo (last seen talking up EA Online Pass) is now "Executive Chairman" of the company, with J. Paul Raines (formerly COO) now stepping up to the CEO position. Executive Vice President Tony Bartel will now occupy the new position of "President," with Robert Lloyd (formerly Senior Vice President and Acting Interim CFO) as CFO. Michael K. Mauler is now EVP, GameStop International. It's like musical chairs, but there's a chair for everyone playing, and it's much softer than the one you're sitting in. DeMatteo suggested that the moves would help GameStop's goals of "expansion into new markets and continued focus on strategic initiatives such as our new loyalty program, downloadable content (DLC) marketing and sales, and the evolution of GameStop.com into a robust digital platform." Which, if all goes correctly, will bring in enough revenue to allow GameStop to create some more executive jobs. [Via IndustryGamers]
GameStop to offer in-store DLC purchases and new loyalty program this year
GameStop knows how sick you are of those silly, antiquated, digital ways of purchasing your downloadable content, and company COO J. Paul Raines has a solution: buy the content in stores! During today's quarterly earnings call for investors, Raines detailed the new system, as well as the previously discussed customer loyalty program. "We've been working on the technology for DLC for well over a year," Raines said, "and I think what's important to understand is that we've had to create proprietary point of sale technology in partnership with Microsoft to be able to show that DLC catalog at retail. We're also working on merchandising and marketing the DLC content in our stores. So this is something that we feel like the industry is moving our way, and our investments are starting to really be timely and publishers see us as the destination for sale of DLC in stores." Raines also noted that the in-store DLC program will be launching in 35 locations this spring with a "limited catalog," and then adding "select titles and SKUs over the course of the summer." A nationwide roll out is planned for the fall. Also launching nationwide this fall will be GameStop's new customer loyalty program, which will be tested in four regional US markets beginning in May. Raines declined to name the test markets, saying only that we'll "have to wait till May 28 to find out".
GameStop rewards program launching this May in 'four markets'
[The Master Shake Signal] Ever heard of a French gaming chain named Micromania? Yeah, neither had we until this morning's GameStop conference call, where the game retail giant's CEO J. Paul Raines specifically cited the (GameStop-owned since 2008) franchise for its member loyalty program ("MegaCart") and the success it's had in Europe. "We believe that the loyalty program at Micromania drove some of the highest sales per store in Europe that we've seen, so we think it's a very effective program, and that's the base for what we added to our existing loyalty program here at the Edge," Raines said, confirming the rumored plan to add a customer loyalty system at GameStop. When asked about when the new loyalty program would start rolling out, Raines stated that it'll be arriving this May in "four markets" (which could be anything from entire regions of the US to specific states or anything in-between -- we've followed up for clarification). So what can GameStop consumers expect from this new loyalty program? Not many details were given, but a few speculative ideas were offered. "Ours will have different rewards, it won't be purely a markdown program that gives you discounts once you reach a certain threshold," Raines said, adding, "It will also have unique rewards like tickets to shows and early entrance to midnight launch, etc." No mention was made of how this will effect those of you with current Edge card subscriptions, nor if this new rewards program will be separate altogether. We've contacted GameStop corporate for clarification and will update this post if we hear more, but for now you can read Raine's entire statement after the break.
GameStop COO proclaims need for educating customers about DLC
GameStop's chief operating officer says the retailer must educate customers on the benefits of downloadable content for retail games. Speaking on a panel at the Game Business Law conference, J. Paul Raines said GameStop must embrace the growing trend of DLC if it hopes to survive in the category. "Downloadable content is a good thing because it enhances and extends games," he told the panel. While the company doesn't have a direct line to console customers seeking additional content, it does offer retail releases of some high-profile DLC. Raines believes that the biggest challenge for the downloadable market is customer understanding of DLC's availability and how to access the content. "That business could grow medium double digits today," he told the panel at Southern Methodist University. "Customer acquisition continues to be a huge part of the spend in this business." It is this view that has the company set on informing its customers of new content available for the games it sells. While it may appear that the sky is falling in the GameStop camp, following cut profit forecasts and share drops during the holiday season, Raines isn't rushing for the closest bomb-shelter. "Rumors of our demise have been greatly exaggerated," he countered. "We'll release financials in a few weeks, so you'll see if we're still in business."
DICE 2009: GameStop exec defends used game sales
A few of the headline-making speeches at the 2009 DICE Summit in Las Vegas have prophesied the rise of digital distribution and the slow decline of brick-and-mortar retail outlets, like the oft-demonized GameStop -- Dave Perry's speech even included a photoshopped jab at the company's logo, re-dubbing it "Used GameStop". However, the retail juggernaut's chief operating officer J. Paul Raines recently took the DICE stage to defend the company's used game sale practices, claiming, "borrowing and lending games are very important ways for people to try new games."He said that the effect GameStop's pre-owned sales have on the success of new games is beneficial -- according to the company's statistics, over 70 percent of trade credits are applied to the purchase of new games. As far as stealing from the coffers of developers and publishers, Raines said that only four percent of used games purchased are titles that were released in the past 60 days. Even with these figures in hand, we still understand developers' protestations -- after all, any slice of a $2 billion pie is highly covetable.
