GameStop cuts coupon, ethical corners

Retailer's actions in Deus Ex debacle will ultimately do nothing but help increase awareness of, affection for competitor's streaming service.

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As the transition from retail games to a downloadable business heightens tension between retailers and publishers, gamers have been getting the short end of the stick with concerning regularity. However, usually the harm to the consumer comes in the form of Byzantine preorder incentive schemes or senseless limitations on content, such as a fully downloadable version of Madden NFL 12 that must be replaced by a physical copy after three days.

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GameStop's tactic could backfire pretty badly.

However, this week saw the anti-consumer consequences of the digital pissing contest taken to a new level, with GameStop removing redemption codes for a free and fully functioning OnLive edition of Deus Ex: Human Revolution from its retail PC copies of the game. Reasoning that OnLive is competition and that such advertising for the competition is not desirable, GameStop removed those codes from its retail copies before selling the opened boxes to unaware customers as new.

Square Enix has advertised the OnLive code as a selling point for the PC version of the game. It is assumed to be included in the purchase of a new copy of Deus Ex: Human Revolution. The code itself has value. Purchasing Deus Ex: Human Revolution access from OnLive costs $50. Even the one-time-use codes that GameStop is presumably discarding have value, as evidenced by eBay auctions that show savvy gamers selling them to defray the cost of the game by nearly $20 (with two days left for bidders to push that price higher).

I understand GameStop's position. It is a traditional brick-and-mortar outlet that sees the rise of digital distribution as a dire threat first and a potential opportunity second. OnLive is a clear competitor, not just because it sells the same games to players, but because GameStop acquired a separate company to offer its own streaming service starting next year. The two big hurdles in getting traditional retail consumers to go digital are creating a great service and then convincing people to try it out.

Giving away a streaming copy of Deus Ex: Human Revolution for free with every physical copy of the game is a brilliant play by OnLive. Even if gamers aren't already interested in streaming game services, they're likely to try it out just to see how it compares with the experience of playing off a physical copy. And given that one of the target markets for OnLive is gamers with a good Internet connection but otherwise underpowered rigs, that audience is that much more likely to consider streaming as good as, if not better than, what they can manage playing a disc on outdated hardware. So if GameStop is coming to the streaming party two years late (OnLive launched in June of 2010), the retailer might wind up having to not only sell new people on the benefits of streaming, but also topple an entrenched pioneer in the segment.

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You could even say the brick and mortar retailer's vision has been somehow impaired.

So I may sympathize with GameStop's situation, but in its exceedingly finite wisdom, the company has chosen possibly the worst way to go about achieving its goal, from a consumer's perspective. If it felt so strongly about not helping out the competition, it could have always just opted not to sell the PC version of the game and instead offered affected customers an apology and an explanation instead of swiping the coupons out and hoping nobody would notice. (Shortly after the publication of this editorial, GameStop did just that, pulling all physical copies of the PC version from shelves and refusing to sell any more until Square Enix provides copies of the game without the coupon included.)

Selling customers gutted boxed copies of PC games for full price is both deceptive and disrespectful, not to mention self-defeating. The retailer's shady decision to undercut OnLive is a top story on every gaming site today, including the GameStop-owned Game Informer. And I can guarantee that this won't be the only editorial screed to take GameStop to task today. So in treating its customers and business partners with disdain (if not outright contempt), GameStop has damaged its own reputation with the core PC gaming audience that would be most likely to try out its upcoming streaming service. It has also done little more than cast OnLive as David to its own Goliath and given the upstart a healthy boost of name recognition in the process.

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