Gamestop’s purchase of digital delivery service Impulse is no secret by now. Their strategy to make it into a Steam-killer, however, is, or at least was until outed by Baird Equity Research analyst Colin Sebastian’s report. It’s pretty much what you’re thinking, Gamestop is planning on using the EA/Steam feud and Battlefield 3’s conspicuous absence from the aforementioned service to tear a 1.5 billion chunk of the market from Steam.
“The upcoming EA title Battlefield 3 will be sold as a download through GameStop, but not through Steam. Given Steam’s dominance — and insistence on users downloading a Steam client application — publishers are likely to be receptive to a competitive alternative,” reads the report. It seems unlikely that a single game, even one as anticipated as Battlefield 3 can topple the digital delivery giant, but whatever Valve do to counter this maneuver, it’s going to be something to watch.
The Implications of Gamestop’s Strategy
Gamestop’s acquisition of Impulse and their strategy to leverage the EA/Steam feud is a bold move in the digital distribution market. By aligning with EA and offering Battlefield 3 exclusively through their platform, Gamestop is attempting to carve out a significant portion of the market that has been dominated by Steam for years. This move could potentially attract other publishers who are looking for alternatives to Steam’s stringent policies and high revenue cuts.
Moreover, Gamestop’s strategy is not just about Battlefield 3. It represents a broader attempt to diversify their business model and reduce their reliance on physical game sales, which have been declining with the rise of digital downloads. By investing in digital distribution, Gamestop is positioning itself to remain relevant in an industry that is rapidly evolving.
Challenges and Opportunities
While Gamestop’s strategy is ambitious, it is not without its challenges. Steam has a well-established user base and a robust platform that offers a wide range of features, including community forums, user reviews, and frequent sales. Convincing gamers to switch to a new platform will require more than just exclusive titles; Gamestop will need to offer a comparable or superior user experience.
Additionally, Gamestop will need to build strong relationships with other game publishers to expand their digital library. This could be a double-edged sword, as publishers may be hesitant to abandon Steam, which has proven to be a reliable and profitable platform. However, if Gamestop can demonstrate the benefits of their platform, such as better revenue sharing or more flexible policies, they may be able to attract a significant number of publishers.
On the other hand, this strategy presents a significant opportunity for Gamestop. By entering the digital distribution market, they can tap into a growing segment of the gaming industry. Digital game sales have been increasing year over year, and by establishing a strong presence in this market, Gamestop can secure a steady stream of revenue.
Furthermore, Gamestop’s physical retail presence could be leveraged to promote their digital platform. For example, they could offer exclusive in-store promotions or bundle deals that include both physical and digital content. This hybrid approach could appeal to a wide range of gamers and help drive adoption of their digital platform.
In conclusion, Gamestop’s purchase of Impulse and their strategy to challenge Steam is a significant development in the gaming industry. While there are challenges to overcome, the potential rewards are substantial. By offering a competitive alternative to Steam and leveraging their existing retail presence, Gamestop has the opportunity to become a major player in the digital distribution market. It will be interesting to see how this strategy unfolds and how it impacts the broader gaming landscape.
Source Gamasutra
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