GameStop: Our market share will continue to grow

Retail giant GameStop will prosper and grow during the upcoming console transition, according to president Tony Bartel.

Speaking with GameSpot in a wide-ranging interview following last week's E3, Bartel said GameStop's market share stands to grow with the arrival of the Xbox One and PlayStation 4.

Early reports suggested the new platforms from Microsoft and Sony would block, or in some way inhibit used games, but this has proven to not be the case. Both platforms will support used games without limitation, and Bartel praised the companies for this gamer-friendly stance.

This stance, of course, is encouraging for GameStop as well, a company that makes a significant portion of its revenue from secondhand sales.

The full interview, which touches on GameStop's thoughts concerning E3, the health of the Wii U, the importance of the secondhand market, and Ouya, among other topics, is below.

What products, games, or services were you most excited about from E3 last week?

The innovation coming from the two new consoles will usher in a whole new interest in console gaming. Developers seem to be further along in taking advantage of the new innovation than they were in previous launch cycles. In addition, games for the current generation continue to evolve and look fantastic. New IPs like Watch Dogs, Titanfall, and Destiny are also impressive.

How do you foresee the used-game market changing with the arrival of the Xbox One and PS4? [Ed. Note: This interview was conducted before Microsoft reversed its used-game policy for the Xbox One.]

While the Xbox One and PS4 offer consumers different approaches, both provide the ability for consumers to trade-in and sell preowned games, and we applaud Microsoft and Sony for understanding the importance of the preowned market. We also have good relationships with publishers, and know that they also recognize how the preowned market--and the $1.1 billion in trade-in credits that GameStop generates for the industry--positively impacts their business.

Numerous publishers collaborate with us on credit-driven promotions for their top titles with the goal of maximizing software sales. This in turn helps create a lower cost entry point for customers that are new to gaming or want to experience a specific series or title. It’s an ecosystem that works as evidenced by our 48 percent marketshare of PS3 and Xbox 360 software in Q1, and we see it continuing to grow in the coming years.

How do you envision Microsoft's new Xbox One secondhand policies specifically affecting your business?

We are pleased that they support the unlimited trade and re-sell of games at retail and are working closely with them to ensure a seamless trade-in process for our customers.

What do you think defines a true "next-gen" experience? What does that term really mean?

Richer, more immersive graphics is usually the first point that comes to mind, and both the Xbox One and PS4 make definite strides with visuals thanks to the systems’ improved processing power. Other elements that contribute to this next-gen experience are the increase in social gaming components, more robust multiplayer capabilities, and the growing opportunity to enhance game play with additional entertainment options.

Is GameStop expecting Xbox One and PS4 games to remain at the same price point as Xbox 360/PS3?

Our expectation is that new titles will be priced very similarly to current-generation titles.

How are you going to leverage PowerUp Rewards on the Xbox One and PS4?

With more than 30 million PowerUp Rewards members around the world, we are proud to have a very strong community of gaming customers. Just as we have done with the current-gen systems and titles, we will have a slew of trade-in offers, exclusive upgrades and related content, and more to give our PowerUp Rewards customers the premium experience they expect.

"Definitely don't count the Wii U out."

When I visited GameStop last year, [CEO Paul Raines] had high hopes for the Wii U. Clearly, it has underperformed. What are your thoughts on the device right now?

Definitely don't count the Wii U out. At E3, Nintendo announced that there will be a number of new, major first-party titles, including [Mario Kart 8], Super Smash Bros. and Super Mario 3D World, and The Legend of Zelda: Wind Waker HD. They are also launching several games later this year, so we expect to see a lot of interest from consumers as we head into the holidays.

Gamers have been vocal that the used-game market is important to them. Why do you think this is?

Time and again we have heard from our customers that the preowned market is important to them for the current-generation systems, as well as a deciding factor for whether they upgrade to next-generation systems. The preowned market enables customers to try different titles, series, and systems more easily, and later upgrade to the very latest offerings. We expect to see a lot of trades in the coming months--from preowned titles and systems on up to accessories, smartphones, and tablets--to make the transition to the next-gen consoles more affordable.

Sony has announced that its older games, like PS2 and PS3 games, will be able to be streamed on the PS4. How will this affect the used-game market?

There are a lot of details to be revealed including when this service will be available and what titles will be available. Regardless, we believe that this will be a great way for people to sample new games that they don’t own and expect for there to be minimal impact on the buy/sell/trade model. Of course, if this is a subscription model, we'll sell that in our stores.

GameStop is a large company, but has been able to quickly adapt to emerging and potentially disruptive market trends. How have you been able to do this?

As we've done over the past few years, we work hard to keep a long view of the industry, while remaining agile enough to move into different markets we feel will be beneficial not only to our business, but our consumers. One excellent example is our increased push into the new and preowned mobile devices business in the past two years, and we've since been enjoying notable growth each quarter in that category. The same can be said for our efforts around DLC, with our working closely with publishers and keeping our customers informed about what’s available, especially regarding exclusive offers.

Microsoft has tested out offering consoles on a subsidized basis; the $99 Xbox 360 was even sold at GameStop. Do you think this pricing model could be a way forward for consoles?

Some customers enjoy the subsidized pricing model, while others prefer to pay full price. With that in mind, similar models could certainly be implemented with both the Xbox One and PS4 and be successful. Regardless, GameStop’s ability to offer trade credit assures gamers that we will be the most affordable place to purchase their new consoles and software.

The Ouya is launching at GameStop and other retailers this month. What are your expectations for the new platform?

We were excited when the Ouya reached (and then surpassed) its funding goals on Kickstarter, as there is a rich, growing collection of titles available in the Google Play store. As we've always said, we’re for the gamer, so we’ll continue to carry the products that the gamers want.

A lot of people believe streaming will be a major player going forward. Sony bought Gaikai for its cloud service and GameStop picked up Spawn Labs. What has become of that acquisition?

We continue to move forward with our beta testing program and are evaluating different ways that we can best leverage all of the technology that Spawn Labs can offer us and our partners.

Every Xbox One game will be available digitally on day-one, and Sony has been clear that digital will be a focus for the PS4. Is this focus on digital for next-gen a problem for GameStop?

Day-one digital offerings of titles have been available in a number of instances with current-gen systems, and while there has been interest, we also find that most customers prefer having a physical copy of a title. Regardless of how consumers decide to purchase a title, GameStop will be there to help them make as seamless a purchase as possible.