According to DFC Intelligence, the video game industry will rake in $67 billion this year, thanks in part to the explosion of digitally distributed games across tablets, smartphones and gaming devices. GameStop, the largest specialty game retailer, has been preparing for this digital future through embracing the cloud and online games.
Most recently, the company has entered the tablet market, selling a variety of NVIDIA Tegra 3-powered devices directly to consumers and even creating its own game controller to enhance the tablet experience. Joe Gorman, vice president of GameStop’s mobile business unit, talks about the impact tablets are having on the video game industry in this exclusive interview.
How have sales of tablets evolved since you started selling them?
We have expanded from a couple hundred stores last fall to more than 1,600 stores now selling tablets. Partnering with Google on the launch of their tablet allows us to bring the latest and greatest tablet to our customers.
How important is the console-style controller to gamers purchasing your tablets?
It is important in that it provides gamers the way to experience immersive gaming on a tablet. We have partnered with some great developers to offer our customers pre-loaded games featuring controller game play on the tablets we sale.
What are your thoughts on today's multi-screen gaming experiences that were a major trend at E3?
It was certainly the hot topic at E3. From Nintendo’s Wii U to Microsoft’s Smartglass to Sony’s Cross-play, each video game console manufacturer highlighted multi-screen functionality as the next big thing for console gaming. This type of innovation is what the category needs in order to drive consumer enthusiasm as we near a new console cycle.
What impact do you think the lower prices of the Nexus tablet will have on getting more gamers to buy a tablet?
With its impressive processing power and graphics, the affordable Google Nexus 7 tablet is an great option for gamers looking to buy a tablet. GameStop customers can utilize our buy-sell-trade model and take advantage of a 30% trade bonus on all items traded towards the pre-order of the Nexus 7. This includes trades of video game hardware, software and accessories as well as iDevices and eligible Android tablets.
What are your thoughts on the Tegra 3 technology inside the Nexus as well as other Android tablets that Gamestop sells?
When GameStop began evaluating tablets to sell, one of the main criteria we looked for in a tablet was superior processing power. The Tegra 3 chip was the one that stood out in the crowd. GameStop was the first retailer to have the first tablet utilizing Tegra 3 technology, the Asus Eee Pad Transformer Prime.
As game tablet games become more console-like experiences that can be streamed to HD TVs, what impact do you see this growing sector having on the traditional console business?
Console gaming remains the gold standard for in-home gaming. While tablet gaming is great for on-the-go play; nothing compares to the rich gaming experience delivered by a video game console.
How many types of tablets does Gamestop sell now and how big a part of your business is it today? How do you see that growing?
Our assortment of tablets continues to grow. We now carry several from Acer, Asus, Toshiba and others, including the 7 inch Acer Iconia, ASUS TF300t, and the Toshiba Excite 10. We expect our mobile business which includes tablet and iDevice sales to be a $150 to $200 million business this year.
Many tablet games are free or very low-priced, what impact could that have on the traditional games business when you look at what's happened with the music and movie industries when they went digital?
Tablet games have always been inexpensive or free. Mobile gaming on smartphones and/or tablets has impacted video game handheld sales, but has not cannibalized AAA console video game sales. There are many factors that make the video game industry different than music and movie business which make a more challenging migration to digital. Those factors include video game file size, adequate broadband speeds, a viable business model, etc.
Today, GameStop is participating in the sale of digital games. Whether buying digital downloadable content in our stores or online, downloading digital PC games thru the PC download platform on gamestop.com or playing freemium games on Kongregate.com, we are meeting the gaming needs of today’s hybrid customers.
What excites you about the way the tablet industry is expanding from both a technology and mainstream acceptance standpoint?
One of the exciting things about tablets is that they are drawing people into gaming. This increases the overall interest in the category, which is good for all of the companies involved in gaming.
How could the Nexus help the fragmented Android tablet market?
We believe Google’s entrance into tablets will definitely raise the awareness level of the Android tablet market and with its affordable price point, increase Android tablet adoption.