Even though it’s estimated that the gaming industry will total $18 billion by 2015, beloved video game retailer, Gamestop, is reportedly closing 120 to 130 of its worldwide stores by January of next year. CEO Paul Raines made the announcement at Gamestop’s 2014 Investor Day on Wednesday, with the excess unsold merchandise likely to be traded for a low cash payout. On the surface, this doesn’t seem to be that major of a change, since that’s only roughly 2% of their total 6,457 retail locations, but the closures are just a part of the overall broadening of the company and a step away from the sale of physical game disks and refocusing toward expanding its subsidiaries in the mobile market.
In addition to closing their gaming stores, Gamestop, already “the 3rd largest and fastest-growing AT&T retailer in the US”, also plans to open between 200-250 Spring Mobile Stores, which is an AT&T retailer recently acquired by Gamestop (more than doubling the 164 stores currently open). Another subsidiary, Simply Mac will open 20-25 new stores (adding to the 23 operating today). Gamestop will also increase the 31 Cricket wireless locations it’s operating to well over 100. The company is calling this change “Gamestop 3.0” and Raines described the change as “a new phase of the company’s lifespan that will see it aggressively expand its footprint into gaming-adjacent tech fields”
What concerns me is that this diversification seems to be motivated by the likely collapse or at least downsize of the physical-media gaming market. If you take PC games as any indication, there are far less physical disks being purchased and gamers are instead turning to Valve’s Steam Store for their new games. Also used games, which are a cornerstone of the Gamestop market, seem to be dwindling as a source of revenue as the trend towards online game purchases continues. This begs to ask the question: Is Physical Media, particularly video games, a dying industry?
In my opinion the answer is no. Digital media has quite a few advantages, (it enables users to purchase and play games fairly quickly and conveniently, doesn’t require physical storage, is far easier to organize and locate and eliminates the risk of wear and tear damage to your disks) and I have purchased quite a few digital games myself, but I still don’t think that digital is ready to completely replace physical media and I don’t think it should. For one, a new game will require about 15 gigs of storage on a hard drive in order to play, which would limit the amount of different games you can have installed at one time unless you spring for larger storage. Another concern is the time it takes to download these games over wifi, with some games averaging about 8-10 hours to download on a strong signal. There’s also always a risk of electronic blackouts, like what we saw with the Playstation Network back in 2011. The thing that turns me off the most about digital only media is that you do not own digital media, you just pay for the privilege to use it. I’d much rather have access to the disk and be able to do what I want with it, like let a friend borrow it or even resell it to get money for the next game.
So there you go, fellow media fans. Gamestop may soon be “GAMEstop” in name only, but hopefully this rebranding doesn’t speak for the future of all physical media just yet.