Why GameStop's "Store Of The Future" Is Anything ButS

Having trialled them in select regions for almost two years now, GameStop last night officially opened their "store of the future" in Palo Alto, California. Get a good look, because it'll soon be the past.

The concept store, a prototype of the kind of changes the mega-retailer will be rolling out to its 6000 stores worldwide, certainly looks the part. Gone are the days of a pair of store assistants, a monitor and a TV on the roof, replaced with an outlet that's designed to be as modern as the medium its selling.

There will be web-connected PCs that have downloadable and flash games to play. There will be large touch-screen displays, which gamers can use both for information as well as to buy things like downloadable content. These displays will even store your customer history, activated via your customer loyalty card.

It's all flashy, and for 2010, looks fairly impressive. It's designed to maintain the retailer's dominant position in the marketplace as we move into a digital age. Yet, beset on all sides be enemies bent on its destruction, it's far from enough to keep pace with a rapidly-evolving games market, meaning it'll also be the chain's last hurrah.

The future of video game retail is in downloads. This is not up for debate. We can yearn for the heft of a box and the feel of a manual all we want, but one day, and that day will be soon, we won't be buying video games off a store shelf. At least, we won't be in quantities to support a retailer the size of GameStop.

That day may be five years away, it may be ten, but it will come. And if this is all GameStop can do to counter this fact, then they're done for.

A central design feature of these new stores is the fact you can buy downloadable content. You walk in, swipe your credit card, and you get a redeem code for the DLC you just bought. You then have to go home and download it. Sure, you'll get loyalty points for doing so, but does GameStop HQ not see the absurdity in this practice? In thinking people will leave their homes, go to a store, give that store money, then return home to download something that had they stayed at home, would have finished downloading before they'd even arrived at the GameStop?

Were this the only challenge the retailer was facing, you'd at least fancy their chances of finding a workaround. But it's not.

Publishers like Electronic Arts and THQ are waging an open, public war against GameStop's practice of encouraging the sale of used games, a cornerstone of the retailer's business plan. Other publishers, like Sony, are looking seriously at joining in.

At this early stage it probably hasn't' had too adverse an effect, but the more games are released that encourage new purchases - which for GameStop carry a negligible profit margin compared to their "buy for $10 and sell for $30" used games - the more it will hurt them. And if people stop buying used games at GameStop, GameStop, utterly reliant on the sale of used games, is in trouble.

The boxed PC market is as good as dead, with digital delivery services like Steam moving swiftly to dominate the market with their convenience, portability and and plentiful bargains. You can already buy full Xbox 360 games on that console's marketplace, and more and more titles are being released as downloadable games, purchased directly from a console rather than a store.

The latest PSP doesn't have any kind of boxd game whatsoever, nor do any of Apple's handheld platforms, which are fast becoming some of the most important devices in the portable space.

As a brand, then, you could say that to succeed in the future, GameStop would need to evolve and become an online retailer. Steam, the PlayStation Network and Xbox Live Arcade, all rolled into one. That would be a sound business plan, and something the name "GameStop" with its current pull could probably manage. If Amazon could sell Xbox Live Arcade games, there'd be no stopping GameStop from doing more.

And it's trying. Sort of. GameStop has bought Kongregate, an online gaming portal, and Jolt Online Gaming, which does much the same thing, but these are cheap, peripheral solutions, not a meaningful means of shifting the company's business online.

Why GameStop's "Store Of The Future" Is Anything ButS

This is where GameStop's nature will be its undoing. Like other outdated stores - let's use Blockbuster as an example, which when movies went online found itself adrift - it's not enough to simply cut their losses and move online, because there are thousands of stores worldwide with tens of thousands of employees on the books.

Those can't simply be tossed aside, and like Blockbuster, when the end comes GameStop will find them to be the burdens that catalogue its demise, when the only time you hear about them are when 1500 employees are laid off, and/or hundreds of stores shut down as the market the retailer once dominated disappears from beneath its feet.

Why GameStop's "Store Of The Future" Is Anything But

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