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GameStop's plans to stream console games via the cloud

Beta underway with retailer 'slinging' console titles to any internet enabled device

Gamestop President Tony Bartel spoke at Cloud Gaming USA about how the retailer plans to adapt to a digital business model.

Bartel was quick to point out that GameStop already has a huge digital reach. "It's going to be close to half a billion dollar business this year," he said, adding that it's growing over 50 per cent this year and expected to continue growing 50 per cent over the next three years.

To reach this goal, Bartel is focusing heavily on cloud gaming services, power-up rewards cards, and tablets.

"Instant gratification, multi-device flexibility, and a broad game selection" are the main appeals of cloud gaming according to Bartel, who went on to explain the unique benefit of their recently acquired cloud gaming company, Spawn Labs.

"The reason that we purchased Spawn Labs was because they had patented technology that took console games that actually uses consoles in a data centre to sling those games at a very low latency onto any internet connected device.

That allows us to work with our publishing partners and our platform holders without any additional porting whatsoever. We can literally take the discs that are out there today put them in the machine and begin to serve them from the data centre environment."

"Literally our selection is anything that is on a disc today, as we are literally using a PS3, Xbox 360, or PC."

The beta for GameStop's site allows users to try demos straight from their browser. If they like it, they can simply hit buy at the end of the demo.

Doing so will begin the download, but while the game is downloading to the consumer's hard drive, they can start playing the full game immediately through the cloud. Their save data will be carried over too.

Bartel explained when users were asked why they were excited about GameStop offering free cloud trials, 79 per cent said it was to try games they otherwise wouldn't. 61 per cent said to try games when they're already thinking about them. And 58 per cent to avoid download of larger files.

He further added that "if you buy a game at GameStop and you're a power-up rewards member, we will allow you to sling that game to any internet connected device.... You can take it on the road, take it on the PC, put it on any internet enabled TV, take it on a tablet."

Since one of cloud gaming's biggest draws is the ability to transfer a game from one device to another, Bartel notes the importance of tablets, but laments their current dearth of what he calls "immersive" console-style games. "Part of the barrier to getting immersive games on the tablet is that you don't have the controller, so you're really limited."

"What we're doing is testing selling tablets preloaded with some more immersive games, and the availability of having a wireless controller attached to it so that you can play immersive games whether they've been streamed by Spawn, or downloaded via Impulse or via the PC app download."

He noted that GameStop is currently testing selling tablets in Dallas, TX right now.

Aside from Spawn Labs unique technology, Bartel emphasised the role of retail to educate consumers. "Last year we began to sell digital content that went along with physical games. When we asked customers who bought it, we said 'have you ever bought DLC before?'

"DLC had been out there for three years, yet 50 per cent said they've never purchased or even heard of DLC before. When asked about their intent to repeat, 90 per cent said they'd go back to GameStop and pick it up... That's almost double the rate of repurchasing intent they have on Xbox Live. They come to the store, they talk to someone who's seen it, and it drives discoverability of that digital asset."

"When we asked them what their satisfaction rate was, there was an 87 per cent satisfaction rate. 78 per cent attributed this primarily to getting power up rewards points. 59 per cent said it was because the store associates were great. And half said they had currency there they couldn't use anywhere else."

Bartel explained the importance of the power-up rewards card by being a big draw for gamers who will get additional content, but it's also useful for tracking what people are buying with 13 million members currently.

There are two tiers of rewards. A free membership, or a $15 membership that grants additional discounts. Bartel claims that 65 per cent choose to be members, and this group spends three times as much.

Ultimately, Bartel cites Netflix as their closest parallel, calling their recommendation system phenomenal. But unlike Netflix, GameStop plans to have streaming releases of new titles on day one. Bartel said Netflix set a "blueprint" for them, but they'd like to take it a step further with power-up rewards and the ability to add another billion plus trade credits into the market place.

"We're not trying to move the entire business to the cloud, but to augment the console and the PC business that we have today."