GameStop doesn't think gamers are ready to adopt cloud-gaming in a meaningful way

Retailer shutters its R&D team Spawn Labs, and will instead focus on supporting Sony's PlayStation Now.

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GameStop announced today that it has shuttered Spawn Labs, the R&D team it acquired in 2011 that was working on a cloud-based streaming service. GameStop vice president of investor relations Matt Hodges told GameSpot today that while cloud-gaming could be "revolutionary" some day, it's not something gamers are ready to get behind right now.

"While cloud-based delivery of video games is innovative and potentially revolutionary, the gaming consumer has not yet demonstrated that it is ready to adopt this type of service to the level that a sustainable business can be created around it," Hodges said.

Instead of creating its own cloud-based gaming platform, GameStop will focus on supporting other services like PlayStation Now by selling subscription cards in its stores.

"Also, we recognize that our strength is in helping our vendor partners connect with gamers, so we will focus our energy on selling existing services, such as PlayStation Now, through our retail channels," he said.

PlayStation Now will allow gamers to stream back-catalog games to systems like the PlayStation 4, PlayStation 3, and PlayStation Vita. The service is currently in beta and is expected to launch publicly this summer.

GameStop CEO Paul Raines said in 2012 that it had Spawn Labs' streaming service up and running and that the company even established six data centers around the United States to support the service. Several hundred GameStop managers got to try it and it reportedly worked very well. For some context, here's what Raines told us about Spawn Labs' cloud-based service in 2012 and his general feeling about cloud-gaming overall.

"It's a console. It's a GameStop PowerUp Rewards library. And you pull it up and click on the game you want to play, and you can play the game. We sell you a controller for your Internet-enabled device--tablet, laptop, etc.--and the technology works very well. Where we're at now is developing commercial agreements; who we're going to launch with, et cetera," he said at the time. "And then we’ll disclose more of that as it gets closer."

"Certainly streaming gaming has not…if you go back to E3 four years ago, cloud gaming was going to take over the world. It's an interesting business. It's an early, early business. We don't see a ton of consumer demand yet there. But we're trying to position ourselves for it. I think you get into console streaming, PC streaming, PC downloads and tablets, and all of these have different consumer adoption curves, but I can't say that console streaming has seen a huge adoption yet. As far as the Sony deal, Sony has said the Gaikai technology will be used primarily as part of an online gaming service. So that will be interesting."

Eddie Makuch is a news editor at GameSpot, and you can follow him on Twitter @EddieMakuch
Got a news tip or want to contact us directly? Email news@gamespot.com

Discussion

123 comments
Nepti
Nepti

For me the biggest issue with cloud computing and even digital downloads is ownership. With the backdrop of Microsoft's original proposal regarding digital only content, I am very skeptical when it comes to persistent and permanent access to digital purchases.

Zloth2
Zloth2

OnLive has been going for years so a sustainable business HAS been created around it.  Still, I know what he means.  Honestly, the internet isn't ready for it yet.  Once we get a lot more high speed connections out there (and the backbone to support them) then it could work.

lbryson8
lbryson8

I don't understand people who are against this. We get it you want a physical copy of your game. No body wants physical copies of their music anymore. Physical copies of movies are being phased out hard core. Why are games any different? Because then you are required to be on the internet 24/7? I mean come on... if your internet goes down for 5 seconds most people lose their minds as is so mentally your already required to be online 24/7. I just dont get it

TheWatcher000
TheWatcher000

Gamestop and I actually agree on something?


Who thought such a thing could happen?

donmurray29
donmurray29

As a person who has been defrauded with wi-fi/ cloud, let me make this clear, it's not safe and good at all.

Faye_Tallity
Faye_Tallity

FINALLY. We have the most requested feature coming soon for PS, exclusive to PS. Backwards compatibility. Something M$ doesn't have. It amazes me, people are still complaining. 

Dannystaples14
Dannystaples14

We aren't adopting shit. Cloud computing is all about being passive. It is a way of doing stuff in the background and convenience of the internet so we don't have to do it ourselves. What used to be take the memory card out or now hard drive out and take it around to a friends house to continue your saves in another place simply requires you to log in.

That is all the cloud gives us. How can anyone not be ready to adopt it?

This is more like "People are becoming wise to how bad a company and store we are and our stock is probably going to crumble into rubble any day now, and we don't have the skill to pull this off. So instead of admit this we will pretend it wasn't something people wanted instead."

mikz_nyc
mikz_nyc

Cloud-gaming?,we don't need that crap

enoslives7
enoslives7

Gamestop basically has stage 4 cancer. It's only a matter of time before they go the way of Blockbuster. I give them 3 years.

I'd rather support family owned game stores who have retro games. 

Celsius765
Celsius765

i still might buy a ps3 next gen is still moving at a crawl.

Moun7ainMan
Moun7ainMan

Of course GameStop feels this way. 

maxpowr3
maxpowr3

Would any console producing company want to buy into Gamestop's system when they can culture one of their own like Sony and Nintendo did? PC gamers have enjoyed Steam [I won't say gamers have enjoyed Origin] which is why Gamestop hardly sells PC games. 

northArrow
northArrow

Cloud gaming won't take off until there's some tangible benefit for the consumer to do so. The convenience of not driving to the store is small potatoes

IndremaLover
IndremaLover

Someday, our children will laugh at how back in the "olden days" we used to actually get into a car and DRIVE to these places called "Gamestops" and buy our games on a physical round plastic thingy.



megamatics
megamatics

Cloud Gaming is technologically impossible to be beneficial to anyone. There isn't a single game or cloud based function that isn't affected by LAG.

gottago42
gottago42

PlayStation now games streaming rental and other streaming services is the absolute truest form of DRM, you don't ever own the games you're just streaming them open your eyes people!

b74kd3th
b74kd3th

I'll keep saying it, as long as there is no net neutrality in America and the cable companies get away with charging high for low internet speeds cloud gaming or cloud anything will never take off

coolguyhero
coolguyhero

@Nepti  digital only not a good model for gamers, size will grow sooner on hardisk, if game corrupt redownload again but in physical just reinstall.

Zloth2
Zloth2

@lbryson8 A lot of people always react badly to something new and different.  Remember when rumors of this new console generation started flying around about two years back?  The forums were full of "we don't need this!" and "they're only doing it to make us pay another $400!"

Zloth2
Zloth2

@donmurray29 Because fraud is a new crime that never existed before computer networking??

Xirtahm
Xirtahm

@Celsius765 Actually, now is the best time to get a PS3.  There are TONS of great games for it that you can get super cheap.

nazgoroth
nazgoroth

May as well, if you can spare the money. The ps3 is not exactly a misbuy. Bought mine late 2013 and own more games for ps3 than for my ps4 and Xbox one together...

aegis_kleais
aegis_kleais

@maxpowr3  Spot on. Gamestop is a joke to PC gamers. I can't speak for console gamers; Gamestop might be more respected, but for them to say they have any validity in the PC market is like Microsoft making one of their apologies and promises to focus more time towards PC gaming. It's all talk, and will never happen.

WereCatf
WereCatf

@IndremaLover Yeah. It's the same effect as when you take an old 8-track player and some cassettes and show to a teenager -- they'll laugh you out of court all day for having to "rewind" and tussle with silly mechanical cassettes and the poor audio-quality and all. Makes me feel old.

IndremaLover
IndremaLover

@megamatics      Wow, what an extraordinarily uninformed statement.  Hundreds of thousands of businesses around the world are utilizing cloud-based software every single day.  You sound like the guy claiming the automobile will never replace the horse-drawn carriage.  

graceful_goku
graceful_goku

@megamatics  Professional programmers, compuiter scientists and engineers contradict your statement, you probably  barely know how what creates lag. 

WereCatf
WereCatf

@megamatics"or cloud based function" -- I sync my contacts, calendar, Keepass2-database and a lot of other things all the time. Those are all "cloud-based" functions, and they certainly all work perfectly well, regardless of any latency.

WereCatf
WereCatf

@gottago42 I don't own the movies on Netflix, either. Doesn't mean that it isn't a terribly handy service or that I would even want to own everything there.

McGregor
McGregor

@b74kd3th  I really like that Google is pushing cable companies to re-think their strategy. People want the speed, and Google is proving that.

jrcast84
jrcast84

@b74kd3th what do you think of using the cloud to process packages of information?

nazgoroth
nazgoroth

Playstation essentials, ugly ass boxes great games.

megamatics
megamatics

@IndremaLover @megamatics  Not autonomous cloud based systems, because that would be impossible to achieve without something close to fiber optic cabling which offers the lowest amount of latency between host and server, or host to host. The internet can do many things but when most of that is ruled by money grubbing ISPs you can pretty much not bet on it any time soon. If they gave everyone Fiber Optic cabling you can expect to have your service costs go up exponentially, making the benefits of using cloud gaming more expensive than it costs to buy a disc and play it. 

megamatics
megamatics

@graceful_goku @megamatics  ...everything on a Network uses Ping (Calculation of sending time between server and Host or Host to Host). Computer Science, Engineer, and Professional Programmers wouldn't know about networking technologies unless they took a course like CCNA or Network Plus. You are Wrong... 

gottago42
gottago42

@WereCatf Netflix is also DRM but if you're ok with streaming games and never actually owning them well good for you,

most PlayStation fanboys are ok with whatever Sony does even if Sony's giving them the shaft

b74kd3th
b74kd3th

@McGregor @b74kd3th  yea but, their market is so small, and the cable/phone companies are trying to lobby the local governments to pass laws not to let them in, where I live it's nothing but TW soon to be Comcast, with no competition

b74kd3th
b74kd3th

@jrcast84 @b74kd3th  as a service to the home consumer the cloud is to slow, most people only have 1mbps up, that just doesn't cut it

megamatics
megamatics

@WereCatf @megamatics  Please don't argue semantics... You would understand the terms like Host when used in that cadence to differentiate between the devices so as to not confuse someone. Servers can be privately hosted by an End user or they can exist somewhere on a cloud independent of the user. This is why the distinction is needed between a server and host, but of course you couldn't understand what I'm saying because you didn't actually study networking in as much depth as I have. 

WereCatf
WereCatf

@megamatics @WereCatfNo, if you knew what you were talking about you'd know the correct terms are "client" and "server." A host can be either of those, it does not denote what sort of a role it plays in the network. The rest of your comment doesn't make any sense whatsoever, it doesn't matter if something functions "privately" or not -- doesn't change its role.

megamatics
megamatics

@WereCatf @megamatics  Host is substituted for End-User. a Server is a system that governs itself on the network. Just in the way we are interacting with the Gamespot server right now I would expect, unless these comment sections function privately from somewhere else. 

WereCatf
WereCatf

@megamatics You don't need to take some such silly courses just to learn about networking. You've never heard of concepts like, you know, self-study? Just as an example of how little you actually know I could point out that a server is a host -- there is no such a thing as server-to-host, it's still host-to-host communications.

Faye_Tallity
Faye_Tallity

@gottago42  You are in DENIAL, if you thought you ever "owned" your game. My GTA 4 game was stolen from my apt, from a "friend". I can never prove that I owned that copy, even if I called the cops, as it was not a recent purchase. My name & address are not on the receipt. I didn't realize it until a week or so later. If it was "mine" I can prove it, at any time. Which defeats the purpose of stealing, since it's so hard to prove. Simply put, you never own anything you buy. Had that been a digital copy, that would not be a problem. I still won't own it, or the system it plays on. At least I can prove the system was tied to my email, at some point. You "rent" everything on this planet. If you ever really "OWNED" your possessions, you'd be an international conglomerate. You can prove everything is yours, no matter what. With OUT needing a useless receipt. You'd own everything, from everywhere, just because you bought it online. You don't own even your house, even if you bought it, if you don't pay your mortgage, it's not yours anymore. Sounds more like a rental house, now doesn't it? Truth hurts, I know. Don't worry about NOT owning your possessions. You can't take it with you, when you die anyway. You only own your soul.....    

WereCatf
WereCatf

@gottago42 Depending on the price, yes, I would be ok with it. If it was much more expensive than what I pay monthly for Netflix then no, but a similar price and a large selection of games to choose from? Well, sure. It's certainly easier than download and installing games and I don't even have to lose space on my HDD for that.


As an aside, I am not certain if you're trying to insinuate that I'm a Sony - fangirl, but just to clarify things: I don't even own a PS4, nor am I going to.