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GameStop backs Online Pass

Retailer to sell DLC for Microsoft in store; "We believe we're really going to drive this category for the industry," says exec

Specialist retailer GameStop has said that it fully backs new publisher initiatives to charge consumers of second hand games for additional content and features such as online play.

Speaking to investors following yesterday's record financial results, the company said Project $10 has not impacted its sales of used games, and it believes it can help educated consumers unaware that downloadable content exists for their games.

"There have been some questions concerning first user only content and the effect on our used business," said CEO Dan DeMatteo. "We have not seen an impact thus far and as a matter of fact, we will turn this into a positive with our ability to sell DLC through our investments made in technology to market and sell this content in our stores."

Paul Raines, chief operating officer of GameStop added that the retailer is looking forward to the launch of EA's Online Pass - which will charge second hand consumers for access to play sports games online - adding that second hand consumers are not regular online players.

"We support the creation of added downloadable content for popular franchises, as we see that as extending the life of titles and broadening the base of game players," he said. "We do not anticipate an impact to our used margins due to this program. The amount of used game buyers currently playing online is low, and as it grows, our proprietary models will manage trade and sale pricing to reach margin goals."

The retailer is due to kick off a program to promote downloadable content in stores, in partnership with platform holder Microsoft, designed to simplify the process of finding additional content online.

"These stores will merchandise a limited amount of DLC and promote that digital content to consumers. Consumers will pay for the content with any form of tender including trade credits," detailed Raines.

"This process will eliminate a lot of the friction of searching and discovering content online and will bring the power of buy, sell, trade to the digital sale. The test will expand the SKU count each month through the summer, going live to our entire US store base in the fall."

The company also said that DLC is underperforming in the market because consumers are having difficulty discovering the content, and GameStop's size puts it in a position to help educate the consumer and grow the sector for the industry as a whole.

"What we understand, as many in the industry do, is that the discovery in the marketing of DLC is very under performed at this point in time and by us doing the marketing, showing it on our interactive kiosks, prompting it at our point of sale, and making the transaction seamless at point of sale, we believe we’re really going to drive this whole category not only for GameStop but for the industry," offered Tony Bartel, executive VP of marketing.

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Latest comments (4)

Terence Gage Freelance writer 11 years ago
I find it hard to believe that the pre-owned market won't be affected by such initiatives though - the value of games for both the consumer and retailer will have to be slashed by $10, and GameStop won't make this money back through selling the Online Passes for EA. As a company, they can't really take any stance with regard to such initiative except a positive one, as through such motions EA and the other publishers hold almost all the cards.

Or maybe I'm just cynical and suspecting, and they do really see this as beneficial for the industry for all concerned.
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Richard Foligno11 years ago
Well it doesn't really mean that they need to slash pre-owned prices. From experience, I know that it is often the case that the cost of buying a new game isn't much different from buying the same game pre-owned. This could help widen the gap between prices. For example Sports games rarely keep a high price in stores for a very long time, so new and pre-owned end up selling for 25 and 20. With this online pass system, stores could let the pre-owned price drop, while keeping the new price higher. This way they aren't losing any money.
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Matt Ragone IT tech 11 years ago
What keeps Gamestop honest with these codes that came with the game originally. It makes them money if they say the codes are bad or even not include them, Gamestop has never been honest with its practices in business and there many recordings showing there bad practices in the industry. As a gamer and ex-EB games manager we were told to deceive our customers all the time to eek out every last dime from them and now there doing this to the gamers who are trying to save just a little bit of cash. The industry is forcing gamers to pay outrageous prices for games that 1 are not complete and have lots of glitches in them. If I'm paying 60 to 70 dollars US it better be a A+ game and have no glitches and better push the envelope in the industry like modern warfare 2 did AND NO ADVERTISING unless its for realism stop making brainwashing the gamers. ok I'm off my soapbox
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Jared Mallia11 years ago
Video gaming these days is like renting a car.

You can do whatever you want with it, but in the end, you don't really own it. Just look at that Software/Clock bug the PS3 had this year and the way that it affected OFFLINE games. We aren't in control - and we never will be. Not unless the DLC craze that is currently sweeping the industry gets the boot.
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