After years of selling games, GameStop is going to start publishing them.
GameStop (GME) is launching GameTrust, an independent publishing label will fund, market, and publish five to 10 independent games over the next 12 months, according to Mark Stanley, vice president of internal development and diversification at GameStop.
“We’re now hearing more and more from our gamer base—we have an average of 46 million Power up Rewards customers, plus we have about 64 million individual gamers coming to our stores—that they’d like better access and better guidance into the world of independent games,” Stanley says.
GameStop took its first step into the business of publishing video games with Insomniac Games’ Song of the Deep. In addition to indie developer Insomniac Games, GameStop has signed deals to work with Ready at Dawn Studios, FrozenByte, and Tequila Works. Stanley says GameStop is currently talking to about 20 developers, although no additional deals have been signed. The game studios retain the rights to their intellectual properties.
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“Our focus is going to be console, PC, and VR, and we’re concentrating on that sweet spot of games that’s usually ignored by most of the publishing world—it’s these $0 to $15 million budget games,” Stanley says. “These are what we’re calling in the industry ‘AAA’ indie games. They’re mostly dream projects that studios never had the support to do because they’re smaller games. We’re able to take bigger risks either on through art style or creative or gameplay. And we’re able to combine it with GameStop’s access and assets to find a bigger audience, whether it’s physical or digital.”
This entry into game publishing is the latest expansion beyond the sale of games for GameStop. It’s part of the transformation of the company, according to Paul Raines, CEO of GameStop.
“If you go back and look at the top indie games from the last few years, there are some $10 million, $20 million, and $30 million titles out there,” Raines says. “If you could put together five or 10 of those, it’s a pretty interesting business for us. And of course the gross profit characteristics of this are very different from our retail business because the digital businesses bring strong profit contribution.”
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Raines says these physical games will also become part of the retailer’s buy back and used games business. And Stanley says the company is also tapping into its new collectibles business to sell an array of merchandise around these new games. For example, Song of the Deep will receive a line of children’s books.
While the names of the new games these studios are working on will be released later, Stanley confirms that one of these titles will launch for virtual reality platforms next year. GameStop is offering demos of HTC Vive in stores now and will launch Sony PlayStation VR demo stations in stores this summer.
“From a content perspective, we’re working with some of these developers to bring innovation to VR,” Stanley says. “We’re looking more to 2017 because we want to be able to sit back and learn what the consumer base likes in VR and then see how we can innovate in those areas.”
Ru Weerasuriya, founder and president, Ready at Dawn Studios, says his company’s discussion with GameStop actually started before any other developer was involved.
“We had a chance to have a very open discussion over the years about the possibilities of them being more involved in the industry, funding and publishing games, and how that could bring a new perspective to the industry,” Weerasuriya says.
Weerasuriya says GameStop has been able to retain and cater to a very loyal player base over the years, both through their retail channels and publications like Game Informer.
“With their acquisitions of companies like ThinkGeek, GameStop provides a single point of contact with a very broad reach,” Weerasuriya says. “That expertise and those avenues can have some great benefits to developers and the reach that their games can have.”