Brick ‘n’ mortar survival: GameStop president Tony Bartel shows how retail fits into a digital future

REDWOOD CITY, Calif. — With digital content playing a significant role in the next wave of platforms, traditional retail sales are another victim of popular opinion’s dire prognosis. Yet Wednesday at GamesBeat 2013, president Tony Bartel of GameStop (the video game retail Goliath that built its empire off of the buy/sell/trade model) seems unfazed not only about a digital future but also the downward trend in the current console market.

During a discussion with Adam Sessler, a producer at Internet television network Revision3, Bartel explained why he sees a decline in the current console game market. “There’s been nine straight quarters of negative growth in the video game sector. So I think what you’re seeing is a lack of innovation. I mean, how many people in the crowd have a cellphone in their pocket that’s more than 5 years old?

“There’s nothing [innovative] around that is that old, yet that is what we’re doing with consoles today.”

The recent market decline may only be from an aging current hardware generation, as Bartel makes it clear that the consumer’s anticipation for the PlayStation 4 and Xbox One launch is showing that the console market is set for another growth spurt. He says that not only are preorders for Xbox One and PlayStation 4 units sold out, but GameStop also has a special “first to know” mailing list for next generation consoles, with 2.2 million subscribers. Bartel also predicts significant growth beyond this next generation’s preorder stage: “Our predictions say that next year, in addition to all the growth we’ll see during the holidays, we see the market growing by 20 to 30 percent next year and then 10 to 15 percent after that.”

So GameStop’s traditional store fronts can still provide value to consumers via new shelf hardware sales, but how is the company’s retail strategy going to adapt to a future where downloadable titles, mobile, and a free-to-play model threaten their traditional software revenue? One way is for GameStop to strike promotion deals with digital publishers and developers that will focus on employees selling face-to-face customers on specific downloadable products. “This next Monday we’re going to have, on average, you know, a couple hundred people in line at over 6,000 GameStops around the world for Call of Duty: Ghost. What better time to be taking something to them and saying, ‘Hey! While you’re out here, you got your smartphone? You got your tablet? Here’s a great game.”

GameStop has also made significant pushes toward doing digital distribution of its own. In 2010 GameStop purchased the online game marketplace Kongregate, and it added PC publisher Stardock’s Impulse digital store in 2011, giving the retailer yet another point of leverage in dealing with an increasingly “media free” future.

But the company’s plans don’t just stop, however, at distribution, “We are now a mobile publisher. So if there is any mobile developers out there who want 300 million visits a year and a place where there are rabid gamers who are willing to spend money and you want 26 million people, who again are rabid gamers who want to spend money who we can communicate with … well … go to Kongregate.com. We have a $10 million fund to be used [to publish developers].”

One underlying theme of GamesBeat 2013 — the “Battle Royal” — was a need to be adaptive for a marketplace that is in transition toward many different directions, and Bartel’s plans seem to add to that sentiment  “We see ourselves as a hybrid company, because we see the gamer as a hybrid gamer.”