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GameStop: “Disc-based games will be around forever”

Retail CEO Paul Raines not concerned about growth of digital

Despite the rise of digital downloads GameStop CEO Paul Raines is confident that physical products are here to stay, and that his company can find a way to make the best of both markets.

"Disc-based games will be around forever," he told Fortune.

"The market has seen physical music sales down 50 per cent from its peak and physical movie sales down 60 per cent from its peak, but even in a doomsday scenario, disc-based games will be around for a long time. I see a complimentary business where we sell discs plus download like the current console mode."

He also looked ahead to the launch of the virtual reality headsets and stated his intentions for the medium.

"Analysts believe there could be 10 million VR users by the end of 2016, and there are hardware forecasts of $30 billion by 2020. We're going to be the destination for VR."

Raines promised GameStop visitors could expect to see demo units for the three main headsets, Oculus Rift, Sony's PlayStation VR and HTC's Vive in stores and the company planned to increase its PC hardware offerings for customers who need to upgrade for the VR revolution.

"If you look at how we worked with the console makers with our Power Up Rewards data and our customers' buying habits, we're doing the same thing with our VR partners."

Interesting the company is also investing in augmented reality, with AR beacons currently in 40 stores in Austin. The beacons combine with GameStop's mobile app to offer consumers tailored suggestions.

"Augmented reality is working in our Austin stores," he explained.

"People are purchasing items off game trailers we beam to their phones. We measure this conversion rate by store through traffic counters... AR stores are converting at a much higher rate, which makes sense, because it's putting more content in consumers' hands."

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Latest comments (8)

Greg Wilcox Creator, Destroy All Fanboys! 3 years ago
...swapping discs to play a game is so 2000.
Yeah, well... try telling that to folks who still live in areas with bandwidth caps that keep them from getting some of the bigger games or spotty internet service that means it takes them longer to download a game than it would to pre-order physical copies online and then drive down to a mall later to pick up that purchase. :D

That said, GS does indeed have some amazingly woeful mail order. I haven't bought a game online from them since Xenoblade Chronicles, but at least that game arrived when they said it was going to. Packed in a rather dopey and not at all protective corrugated envelope, no less.
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Paul Jace Merchandiser 3 years ago
Well music cd's are still sold in stores despite the rise of digital in that medium over the last two decades so he makes a good point. I'll always prefer physical copies but for my games and some movies I have an ever expanding digital collection. But physical copies will always be my first choice.
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Morville O'Driscoll Blogger & Critic 3 years ago
I don't know... It's not a black-and-white thing, y'know? Yeah, discs are great for people in low-bandwidth areas... except when you have ridiculous situations like the latest Tony Hawks game - 5gb on disc (only part of the game!), 7gb Day 1 Patch - or MGS V on PC, where the only thing on the disc was a Steam Installer file (nice one guys, the environment thanks you for your dgaf-ness).

And then you have publishers not wanting to annoy retailers, so the price of digital gaming on console is still higher than it ought to be. Even with the cost of shipping, it still works out cheaper to pre-order a retail disc and deal with the Day 1 patch than buy it Day 1 on PSN.

The thing I find most dispiriting is the environmental waste - I've been into so many charity shops/thrift stores where there's row-upon-row of Steamworks games. Serial is useless because it's been registered, and the data on the disc is out-of-date, so makes no sense to keep it past the first 2 months. And all those copies of Fifa 10/11/12/13/14/15, which no-one wants to play because they're out-of-date.

So, yeah... Discs are going to be around for awhile yet. I don't know if this is worth going "Yeyyyyy!" over, though. :(

Edit: Actually, serious question: Is there any benefit (environmental/financial) to publishers/distributors running recycling initiatives for older franchise titles, or games where the disc+packaging is useless? I imagine there must be, but at the same time, here we are, 25 years on from CDs-for-gaming becoming a thing, and still nothing from the industry to deal with the waste it creates.

Edited 3 times. Last edit by Morville O'Driscoll on 1st October 2015 9:36am

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Show all comments (8)
Greg Wilcox Creator, Destroy All Fanboys! 3 years ago
@Andrew: http://arstechnica.com/business/2015/07/vinyl-records-are-still-riding-that-big-comeback-wave-sales-up-38-in-a-year/

Everything is cyclical in the entertainment industry.

Vinyl was effectively dead and buried save for collectors and DJ's until the "recent" resurgence (which took a few years). Granted, LP sales aren't going to zoom into the millions per week or month at all like the old days. But seeing actual records in stores is a beautiful thing while this new buzz around them lasts.

Games are tiny bit different than records but paradoxically similar in that many of those older consoles still work (and work a LOT better than most of today's consoles). There's also a larger variety of consoles to choose from (meaning there are a bunch of niche markets for old and new software). LPs play on nearly any record player made anywhere and yes, you can buy old and new content based on your musical tastes.

Finally, in some cases, new and reissued games are getting made for everything from the NES to the PC Engine to the Dreamcast (which still cracks me up seeing Dreamcast games pop up and getting some looking for new old stock to buy).

The Radio Shack analogy doesn't really work because RS really didn't have anything you couldn't get cheaper elsewhere and they rendered themselves obsolete by not being at all competitive with either current or older tastes. They tried to sell games and consoles a few times, but they really mucked up that badly thanks to premium pricing people out of there retail locations.
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Jeff Kleist Writer, Marketing, Licensing 3 years ago
I think it's hilarious how many people are asking for features that were on Xbox One day one until the paranoid massesstarted whining about check-ins.

Buy/sell/trade digital

Discs were unprotected and could be swapped, even copied freely because the data still had to be unlocked.

There will be kiosks out there in a lot of stores where people can get copies of the data, possibly less than five years from now. A USB 3.1 128gb flash drive that people can swap for preloaded drives (on big releases), or suck down the latest patches and updates (still requiring validation with a main server) is the logical place all of this is going.

Gamestop buying ThinkGeek is a big indication of exactly where they're going.

Vinyl appeals to the same people who drop $200 on a game for a pip boy that doesn't work or some statues. Except of course that vinyl is terrible once you get past the aesthetic, and that if people actually cared about sound quality they'd buy Blu-Ray audio, which contains the pure hires digital files all that new vinyl is being created from, without the hiss, snap, crackle, pop, wear, and scratches ;) I have some wonderful Japanese DVDs that came packaged like an LD. Gorgeous.

The real thing is that collectors want physical, and Joe Sixpack doesn't care. There will remain a place for physical for a very long time to come. What shape that medium takes may change, but the glorious streaming future isn't really there.
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Richard Browne Head of External Projects, Digital Extremes3 years ago
@Barrie - because, Gamestop.
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Chris Payne Managing Director & Founder, Quantum Soup Studios3 years ago
I can see VR being good for brick&mortar retailers, as curious consumers can only try it out physically - whereas you can decide whether an XBone is worth splashing out on by watching game videos online. Having VR demo pods will draw the curious instore, and also draw VR converts in to try out new/competing controllers and accessories. That's a service the online giants can't match. Whether that will translate into sales on the spot remains to be seen...
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Shane Sweeney Academic 3 years ago
Gaming related merchandise and hardware, will always be around.

Retrotastic stuff will always be around, we may even one day see the ironic rise of a cartridge based games platform not unlike the rise in popularity of records.

There will always be a need for a physical shop, just maybe not as many as there currently is....
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