Why GameStop sells in-store DLC
Retailer's director of digital content reveals in-store add-on purchases have reached 10 million; sales associates key to driving sales.
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Selling downloadable content in a physical store may sound backwards to some, but for GameStop, the endeavor has been a great success. The retailer's director of digital content Brad Schliesser told GameSpot that the company has moved over 10 million pieces of DLC since it began selling add-on content through a limited pilot program in 2010.
"We had an opportunity over the last two years to prove to first-party that we can play a meaningful role in the distribution of digital content. In 2010, we started with 35 stores and five sellable DLC SKUs in a [pilot program] with Microsoft. Since then, we've added 4,500 stores and 1,800 products available for sale just on the console side," Schliesser said. "And we've sold over 10 million units of DLC in that time period. I think we've proven that retail still provides a very meaningful role, even in the digital content space."
Schliesser believes GameStop's success in this area is due in large part to its employees. He said they speak directly with consumers at the point-of-sale about additional game content, and this is crucial to sales.
"The associate that works in the store is more impactful than any marketing campaign that we could probably ever do for digital content," he said. "That is still a clear divider between what we're able to do and what our competitors are able to do. And quite frankly, what first-party is able to do."
He said though first-party console virtual marketplaces like Xbox Live are able to house heaps and heaps of content, a user is only presented with 5-10 pieces of content at any given time. And even then, he said, it's "buyer beware." The impact of GameStop's sales associates should not be overlooked, he said.
"The associate that works in the store is more impactful than any marketing campaign that we could probably ever do for digital content."
"For the consumers who are purchasing from us, it's a huge value, a huge service to have somebody there that helps them along and helps them make a better decision on what they want to purchase," he said.
Schliesser acknowledged that not everyone will buy into leaving their home to purchase DLC. He said he is OK with this, adding that a market for in-store DLC exists, despite what the "vocal minority" of Internet commenters may say.
"If there is a story that comes out of our conversation most of the people that read it are going to comment and say 'Why would I ever go to a retailer to buy content?' And I'm cool with that," he said. "If you're already transacting through a first-party, fantastic. We can't convert everybody into a GameStop customer. We don't sell sell 100 percent of the physical games now. So I think it's more understanding that there's a market that exists outside of the vocal minority that is still interested in purchasing content [in a physical store]."
To back up his claim even further, Schliesser revealed several DLC attachment rates for major games. [An attachment rate is the percentage of total software sales that also purchased DLC] He said prior to Gears of War 3, GameStop's DLC attachment percentage was less than 2 percent. Since then, however, the rates have largely increased.
Gears of War 3: 10 percent
Batman: Arkham City: 16 percent
Call of Duty: Modern Warfare 3: 17 percent
Mass Effect 3: 50 percent
Borderlands 2: 20 percent
Assassin's Creed III: 10 percent
Halo 4: 13 percent