GameStop might be known for selling games, but that doesn't mean it's not going to jump on a chance to add a whole new revenue stream.
Retailer GameStop giving away games for free might seem like a bad business idea, but that's exactly what it's going to be doing following its acquisition of free-to-play gaming website Kongregate. But Chris Petrovic and Shawn Freeman, general managers of GameStop's digital ventures group and digital business respectively, say that it's actually a fantastic opportunity for the retailer.
Petrovic says that GameStop wants to be prepared to take advantage of the changing face of the videogame industry. He said that Kongregate was unique as its audience was "core" and that there was a lot of crossover between the site and GameStop's retail customers. "We know that our customers play games outside of the living room," he said. "And that they spend time on Kongregate, and that the free-to-play business is growing - and we'll get more involved in that." He added that continuing the relationship with the customer beyond a single purchase represented one of the core focuses of GameStop's business.
Freeman agreed that there was a lot of synergy between GameStop customers and the Kongregate audience, and said that while operating a gaming portal required a very different mindset than running a retail business, he was confident that the expertise of the existing Kongregate staff would be a huge help. "While we broadly understand it, there is a lot of expertise in effectively monetizing that [free-to-play] area and gameplay we get from these acquisitions."
Having a presence in multiple aspects of the gaming world actually makes a lot of sense for GameStop, and will help insulate it as digital distribution becomes more and more popular and its traditional revenue streams start to decline. While it's unlikely to be moving away from retail any time soon, having multiple irons in the fire is a smart move for any business.