As video games move from the physical to digital realms, more and more video game stores around the world are forced to roll up the mat. Stores such as GameStop, EB Games and Games not only have to face the sophistication of online distribution, but also online stores that don't have to pay rents for luxury stores in malls or on the street.
On the flip side, gaming platform owners are reaping more benefits than ever through a business model that reduces publication costs and enlarges their share of revenue. The possibility of change is in their hands and Microsoft has just shown the way.
Microsoft and GameStop have entered into a historic agreement that allows the retailer to participate in the digital game sales market for every Xbox console sold at the GameStop store. This agreement is part of a long-term contract between the two companies that was signed a few days ago. However, people only realized the implications last Wednesday ..
Domo Capital Management, GameStop's small shareholder, explained the implications in a tweet:
Today $ GME confirmed to @DOMOCAPITAL that the contract with $ MSFT includes a share of all downstream revenue (ie digital downloads and digital content) from any device that GameStop brings to the @Xbox ecosystem. GameStop is now participating significantly in the digital realm.
What percentage of the revenue will be distributed to the retail franchise? Will it be enough to change the fate of physical specialty retailers in the future? Will there be a similar agreement? There has been no further answer, because neither GameStop nor Microsoft are willing to explain the details of this deal to Ars Technica. But now a new way has opened up.
You are welcome to share your ideas in comments.