GameStop reveals more details on its Spawn Labs and Impulse acquisitions for digital distribution game business

by Alex Morgen on April 4, 2011

in General Gaming News Bits

GameStop

GameStop has been charting its course for the age of digital distribution, from offering the in-store sale of downloadable content for Xbox 360 and PS3 games to the acquisition of online gaming portal Kongregate.com. GameStop’s digital distribution strategy for games became more crystallized at the end of last week. GameStop recently announced their acquisition of Spawn Labs, an on-demand streaming service (or cloud gaming service), and their upcoming May 2011 acquisition of Impulse for downloadable digital distribution of games. Tony Bartel, GameStop President, along with Shawn Freeman, senior vice president and general manager of digital for GameStop, revealed more details on their plans for both digital distribution methods today in a media call. GameStop’s unique PowerUp Rewards program plays into the digital distribution strategy as well.

How does GameStop plan on offering digital games while still working hand in hand with their current retail stores? To let consumers know about a game’s availability online, or in the cloud, GameStop is planning on a similar presentation to their current Xbox 360 and PlayStation 3 game downloadable content (DLC) in stores. Just as top selling DLC is merchandised in stores, consumers can expect downloadable games to also be showcased in this way. Tony Bartel mentioned it is through two key methods: “discovery” (consumers seeing the product on the store shelf) and “accessibility” (through in-store kiosks). Kiosks currently inform consumers DLC is available, besides store associates being prompted that DLC is available for a game during the checkout process. GameStop will pre-sell downloadable games to PowerUp Rewards members via a Digital Locker, which currently delivers and reminds users of DLC. GameStop’s Impulse acquisition will allow for the download of the digital games, where over 1,100 games are planned to be available on its debut. Publishers can offer cloud storage of game saves, as well as provide multiplayer lobbies, friend lists, achievements and more. Publishers will also be able to use real-time reporting and management tools. The Impulse acquisition is scheduled to close in May 2011, pending closing conditions. GameStop is projecting digital sales to grow from 290 million dollars in 2010 to 1.5 billion dollars in 2014. As for their plans on physical retail stores, GameStop projected a “zero square footage growth” in North America. This means some new stores may appear in some areas, while other stores will be closed to allow for the shuffle. It sounds like the same projections applied internationally, where there will be some growth and diminishing during restructuring. For more details on Impulse, visit www.impulsedriven.com.

GameStop’s Spawn Labs acquisition will allow consumers access to games on demand, at the same time of the release of a retail game product. What this digital service allows is a “no porting required” solution for current consoles (such as Xbox 360, PlayStation 3, Wii) and even previous generation consoles. Spawn Labs’ president, David Wilson, was also on the media call and stated that their unique technology allows players to “take the disc as it is” and stream it. This allows for a console game to be playable on a PC and, in the future, tablets and smartphones. Game publishers are not required to do anything else to their code to make this happen.

Games available using Spawn Labs’ technology will offer a try before you buy approach. Tony Bartel gave the example that games could be played up to fifteen minutes. If a consumer is happy with the sampling, it can be purchased from a “buy here” button. How a streaming game looks will be dependent on the end user’s internet speed, as well their proximity to data centers. Gameplay video will automatically be adjusted, or consumer controlled, from standard definition (SD) quality to HD quality. Minimum bandwidth for 720p display is 5MB per second. Standard definition viewing is available for those with 1MB or 2MB connections. A summary of a user’s bandwidth consumption will be viewable. Five data centers across North America will be serving up the games, whose locations are based on data from GameStop’s PowerUp Rewards program. Other advantages of this on demand gaming service is saving a game on the cloud and the play anywhere capability (PCs, tablets, smartphones). A subscription service, also integrated with GameStop’s PowerUp program, will offer playing the game on any device. So how will this work with game controllers on a tablet or smartphone platform? Using Bluetooth communication, current console controllers can be used. Games that can use more simplified controls can implement that through Spawn Labs’ tech, using built-in “GamePad virtualization technology.” It was also noted that smartphones can be used as controllers to tablet devices. Two betas of GameStop’s new on demand gaming service are coming in 2011, so keep a lookout for more details from GameStop. It was not revealed if these would be open or closed beta programs.

See more details on GameStop’s Spawn Labs and Impulse acquisition announcement here.


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