I don’t know about you, but I haven’t purchased a physical game in quite some time. I don’t know if that’s because the convenience of digital distribution is a welcome change or because I am stuck in Japan and don’t wish to pay international shipping. Either way, it’s safe to say that digital distribution has overtaken my life when I originally thought it impossible.
GameStop, however, does not think this will become the standard for the video game industry. CEO Paul Raines claims in an interview in Fortune that “disc-based games will be around forever.”
“The market has seen physical music sales down 50% from its peak and physical movie sales down 60% from its peak, but even in a doomsday scenario, disc-based games will be around for a long time.
I see a complimentary business where we sell discs plus download like the current console mode.”
His comments come at a time when digital distribution accounts for roughly 1/8 of the $82 billion video game industry. Digital distribution has also cut down on the number of used games in circulation, which account for 1/4 of GameStop’s revenue. The money generated from used games has been slashed greatly in recent years, but Raines believes it will rebound once the modern consoles start being adopted at a higher rate.
In the meantime, GameStop has branched out in several ways to expand revenue and find other means of retail like by buying ThinkGeek. More importantly, it is orchestrating ways to keep physical games in distribution, most recently refusing to sell an Xbox One bundle with Madden NFL 16 installed on the console. Instead, it got a special bundle from Microsoft that came with a physical version of the game.
No doubt, plenty of those will be traded in at the end of the NFL season, and the world will continue to spin.