Back in January we reported on a new partnership between Insomniac Games and GameStop - the latter would actually publish the former's Song of the Deep. Industry watchers and GameStop itself both passed off the move as an experimental one, not signifying a deeper publishing play for the retailer. Clearly, things have changed since then, as now GameStop is establishing a new publishing vertical for the company, called GameTrust. In addition to Insomniac, GameTrust has already signed Ready at Dawn (The Order: 1886), Frozenbyte (Trine), and Tequila Works (Rime). Moreover, GameStop's Mark Stanley, Vice President, Internal Development & Diversification, told GamesIndustry.biz that GameTrust has been in conversation with another 18-20 developers.
Song of the Deep, a smaller scale Metroidvania-style game, is exactly the type of content GameTrust intends to pursue. It's staying away from larger budget AAA efforts for now.
"There's a largely ignored smaller budget games market in our industry and there are a lot of developers who've expressed interest in making smaller games but they've seen challenges getting support," Stanley said. "We have the flexibility of being able to either partially fund or fully fund a project for development, but also we bring in all the different aspects of promotion, marketing, merchandizing and truly developing a new IP as if it were AAA. As a developer when you have a new IP that you've created, kind of like your baby, being able to launch it as an AAA [title] is pretty cool. We have the support of the GameStop board with the birth of this new vertical... [and] we're really taking our time, looking at which partners make sense for a symbiotic relationship. We start conversations all the time with developers on potential projects and some may move forward and some may not but if we start with that really solid footing of vetting out the relationship before we even talk about a game, then by the time we begin talking about a game it's all pretty much positive."
"We've been very close partners with publishers for the last two decades and... so we're not by any means going to risk that... that's why we did a couple things to make sure our publishing partners know that this is not a competing position"
While Stanley wouldn't get into financial specifics, he did note that GameTrust has a certain fund allocated to it for publishing and there will be a separate P&L to manage. That said, "it'll be a while before this has a significant impact on a ten billion dollar company."
"I think we have to take managed risks. If we were to go into this with a $40 million AAA game that would be a pretty huge risk; just making games is an innately huge risk as you know. I think the smart approach, which is what we're following is, look for smaller opportunities or smaller games that are still AAA quality," Stanley continued. "That's one big key for us - even though these are triple-i or whatever you may call them, high-end indie games, we want to make sure that they are still bringing innovation in some way, shape or form, whether it's art style or gameplay or physics, whatever it may be. With those smaller budgets, we're able to achieve that and still bring great content at different price points. It doesn't have to be a $60 game - clearly, with Song of the Deep at $15, we still think that sweet spot is $15-$30, maybe $15-$40."
"Looking at it through the lens of a GameStop operations team who's managing 6,200 stores, I have to make sure whatever we put up there is great games, great content. So we have that curation responsibility that we're taking very seriously. Not to say that in the future we won't look at bigger games, but I think right now we're just getting started and I think we'll stick with smaller scale games because it allows us not only to take more risks but it also allows developers to try new IPs or really make some games that they always wanted to but never had an opportunity to."
Another advantage of working with smaller games for now is that GameStop doesn't effectively compete with its AAA publishing partners like EA or Activision. That was definitely something the company took into consideration as it thought about GameTrust.
"We've been very close partners with publishers for the last two decades and that is our core business, AAAs. That is our bread and butter," Stanley stressed. "So we're not by any means going to risk that. We definitely thought about it and that's why we did a couple things to make sure our publishing partners know that this is not a competing position. This is an enhancement of content around the anchor titles that are out there that really drive the industry.
"Critics have been talking about the death of retail, gosh, since the internet launched... It's a reality of some of the general dialogue out there that GameStop's going to slowly die"
"So one thing is, GameTrust itself... have a whole separate team. That team doesn't play or communicate on any other games - because we have a full merchandise team that works day in and day out with the publishers and each publisher trusts GameStop's merchandise team with very, very confidential information on planning for titles, etc, even before things have been announced. That trust has been built over many, many years, right? So that will continue to be a focus for GameStop. That is still the core of the business. And so making sure we establish this separately allows us to have that separation. So even if we ever get to a point, which will probably be a few years from now, that we decide to go into maybe bigger games, there still will be a separation and we would definitely be treated like a publisher, only an internal one."
Stanley added that he's surprisingly seen a lot of support from other publishers for GameTrust: "The publishers are really looking at this as a positive because many publishers are relying still on the big franchise titles that take two or three years to develop and for them it's great to see smaller content that can have [retail support]."
While GameTrust doesn't have a set goal in mind for the first year, Stanley said it's likely going to be in the range of 5-10 games. "We want to make sure it's very customized and curated. So that means we don't ever want to get too many projects on board where we lose our focus on any one specific project," he noted.
As the former general manager for PlayStation Latin America, Stanley has tons of developer relations experience, and he's been putting that to good use, making tons of cold calls to developers he said, while also taking meetings at major trade events. "It's really about understanding where that developer wants to go as a developer. If you're a small, independent developer you almost have two paths in this world. You want to stay small and just do one game at a time or maybe grow bigger and start getting into two or three parallel projects. What's your ultimate goal and how can we help you get there? Because, at the end of the day, GameTrust, we don't want to brand what this is. We're all about being an invisible platform. And if we can make the game great and help the developer get to where they want to be and help them along, then we've done our job," he said.
Analysts might say that GameStop's days are numbered and that the retailer has to start moving into other business areas, including publishing, just to survive. Stanley takes it all in stride, though.
"It's something we're very aware of," he acknowledged. "Critics have been talking about the death of retail, gosh, since the internet launched. It's true. I remember, I was in a PC gaming company when the internet launched, and it was like 'Oh, retail's going away.' And here we are 25 years later. We realize that. It's a reality of some of the general dialogue out there that GameStop's going to slowly die, etc, but we had record breaking sales last fiscal year and we continue to outpace industry. When industry is down six percent, we're generating positive results. We keep innovating and we keep diversifying. Three years ago GameStop announced it was adamantly going to go into diversification. That was part of the reason I joined GameStop a year ago. I left PlayStation and I thought, 'Wow, what a great opportunity to have my name attached to the changing story of the success of a retailer instead of the death of one.'
"You see different things that we've put in place. GameStop's gone into the mobile business, and we're now AT&T's largest partner. That's actually delivering humongous results and by the end of next year around 50% of our revenue will be video games and the rest will be other pieces. So that diversification story is not only a story. We're actually delivering on it. GameTrust itself is definitely another piece."
Stanley added that a lot of gamers want more unique indie content and believes GameStop can play an important curation role. "A big driver for having established this vertical was the fact that PowerUp Rewards customers have constantly been asking, how are we able to reach better independent content without needing to go to an app store and wasting 30 bucks to try to run into a good game? And we take that seriously. We do try to listen to our gamer base out there," he said. "So this checks off a few boxes. One of them is, let's bring greater content or more variety of content to our gamers. And two, it helps to diversify because under this vertical, we actually receive full revenues from the digital ecosystems - PlayStation Network, Xbox live, Steam, you name it - and we're able to also bring out a variety of new IP. I don't think we've ever seen the independent smaller games [receive] a launch like Song of the Deep will have, which is a full lineup of collectible merchandise."
GameTrust's only just getting started, but Stanley is already making analogies to Netflix. It's certainly a nice ambition to have. "If you draw a parallel to back in the day when Netflix said shipping discs [is not our core business] anymore. We're going into content creation, and by the way, here's House of Cards and Kevin Spacey. You draw that parallel, you see by the list of partners we're really making sure that we're partnering with folks that we know are going to make great games. Period. They're not going to let a mediocre game come out the door. So that, for us, gives us the peace of mind that we don't have to worry about good games coming out, which is great. That's where the name GameTrust comes from. It really is anchored on the trust that they're going to make a great game and they're trusting us that we're going to be able to basically extend the reach and the discoverability of that game around the world," he said.
"We can hopefully, in a couple years, make [VR] more accessible... I think right now there's a lot of 'throw spaghetti on the wall and see what sticks'"
GameTrust is focused on console, PC and VR. Mobile title publishing will still be handled by GameStop-owned Kongregate, and importantly, "all these deals that we make, we have sequel rights but we also have porting rights to mobile," Stanley pointed out. As for VR, Stanley doesn't expect the market to be important to the vertical for a while, and in fact, he was almost shocked by what he saw at GDC this year.
"VR being a shiny new thing in our industry, everybody wants a piece of it... We talked to lots and lots of developers about it, and it seemed to me that a lot of developers [just want] to say they are in VR because it's almost like the flavor of the month conversation, or more like the flavor of the year, and if they're not it puts pressure on them that if they're not talking VR, they may be out of it. They may be 'out of the game.' And I find that a little disturbing because, as you mentioned, it's just so nascent right now that we don't know what's going to happen," he warned.
Stanley added that obviously from a corporate perspective GameStop is happy about VR because it needs a retail presence in order to succeed, but right now "price points are way out of reach for the mass consumer. Right now these are nothing but the one percent toys." The VR companies, he said, need to actively think about a how to give the masses a way to test drive different VR experiences at stores.
"We can hopefully, in a couple years, make it more accessible. For right now, for us, yes, we're interested in the space. Yes, we're talking to developers about VR games. But I'm certainly not lining up to be one of the first games out there," he said. "I'm taking more of the position of, 'Ok, let's let the holiday go through. Let's get a little bit more knowledge as to genres or aspects of VR that people are really resonating with or having a relationship with or having a really positive reaction to so then we can maybe have a better idea of what we're doing on that side. I think right now there's a lot of 'throw spaghetti on the wall and see what sticks.' And then separate to that, separate to the development side is also just the whole potential health concern around VR. How do I make sure that the content that's being made is somehow being managed so that half the people playing aren't puking their brains out?"