GameStop: "We're On Offense When It Comes to Digital"

President Tony Bartel says that in fact, most of the company's digital revenue comes from its brick-and-mortar stores.

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Some believed that the rise in digital distribution for games would lead to the downfall of retailer GameStop, but it doesn't look like that's going to happen, at least not anytime soon. In a new interview with VentureBeat, GameStop president Tony Bartel outlines some of the ways in which the retailer is not only surviving--but thriving--in this increasingly digital age of gaming.

"Most of our digital revenue comes from our brick-and-mortar stores," Bartel said. "The console digital is predominantly things like Xbox Live, PlayStation Network, and Nintendo eShop cards. Then there's downloadable content, which is fast-growing in the console digital."

GameStop's total digital sales for 2013, including the company's Kongregate mobile gaming platform, PC downloads, and in-store digital sales, came out to $724.4 million. And things are already looking up so far this year, with first quarter digital revenue up 9.5 percent year-over-year.

One digital sector that GameStop is seeing solid performance in is DLC season passes. Bartel said Ubisoft games have been particularly successful. "Over 70 percent of the season passes for Ubisoft's games in Q1 were sold through physical retailers," Bartel said, citing Ubisoft data "We believe that we nearly corner that market as far as digital downloads."

"We don't talk about defending against digital distribution. We talk about driving digital distribution. We're on offense when it comes to digital" -- Tony Bartel

For Watch Dogs, 30 percent of the people who bought the game also purchased the $20 season pass, Bartel said.

Bartel went on to say that he believes shopping in a physical store for content is beneficial to the gamer because they can speak with a knowledgeable store associate. If you're shopping online, you don't get that.

"The reason we're so adamant about that is because we believe this downloadable content is incredible content," Bartel said. "It's just that not a lot of people know about it. It's not the most customer-friendly experience to find it on either PlayStation Network or Xbox Live."

Another reason why GameStop's digital business is booming, Bartel says, is because shoppers have flexibility with how they pay for games. "More than 60 percent of the payments for digital content [at GameStop] are not with credit cards," Bartel said. "It's trade credit, cash, gift cards, and things like that."

Overall, Bartel said GameStop's ambition with digital is to try to be a market-leader instead of thinking of itself as a company that needs to survive as digital distribution becomes more and more commonplace. "We don't talk about defending against digital distribution," Bartel said. "We talk about driving digital distribution. We're on offense when it comes to digital."

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