GameStop Acts On Impulse

How to caption this graphic...GameStop Impulsively Spawns Labs?

Traditional game publishers are making more and more money from digital distribution. Even Activision, long known for sneering openly at anything other than a disc sold in a store, is now touting the fact that half their revenue in the latest quarter came from digital distribution (of course, I think they're counting WoW subscriptions in there). This may be good news for publishers hoping to see a bright future coming out of three years of down sales for the industry, but there's one player who's not so happy at the expansion of digital distribution: GameStop.

They are taking the threat seriously, and there's no better evidence than their recent purchase of Stardock's Impulse digital distribution service. Sure, it's not Steam (who has about 70% of the digital distribution market), but Impulse accounts for about 10% of the digital distribution business. GameStop should be able to expand that with their resources.

Interestingly, GameStop has also bought Spawn Labs, which has game-streaming technology that hopefully can compete with Gaikai and OnLive. While I'm on the subject of game-streaming, there's a new kid on the block called Happy Cloud, which has an interesting twist on the idea of streaming games. They don't want to stream you the game so much as make your download of the game happen a lot faster, in a way. They set the game up so you can start playing quickly (in a few minutes), and not have to wait until your multi-gigabyte download is finished (hours later, usually). This opens up the possibility of impulse buying, and Happy Cloud is open to licensing the technology to other digital distributors. This could really speed up the spread of digital distribution.

The upshot of all this news is a further expansion of digital distribution is in the offing, and GameStop doesn't intend to miss their opportunity. Having a retail presence does offer some interesting possibilities for merchandising that Steam won't be able to match. Kudos to GameStop for understanding how the marketplace is changing, and making some moves to try and adapt their business. Let's hope they pull off a successful transition to the future.