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The Consumer Electronics Show is the perfect place to mix it up with some of the most influential people in the gaming industry, so G4's own Chris "Boba" Monfette tracked down Shawn Freeman, senior VP and GM of digital business at retail-gargantuan GameStop. Click the cut to get look at what GameStop is planning for the future, how used game sales effect the industry, and how, exactly, GameStop's magazine, Game Informer, can stay objective.
Chris Monfette: What kinds of opportunities does a show like CES offer to you? What are you looking for here at the show?
Shawn Freeman: Our digital strategy is ultimately to deliver games to consumers anywhere, any time and on any device. So for us, the show is an opportunity to see the new devices that can support games, meet with the companies that are creating those devices and the content for those games…We’ll meet with Motorolla, Panasonic…
Certainly over the past few years we’ve seen the rise of the digital, but physically, GameStop continues to grow, opening new stores, superstores, expanding, etc…
We’re still a big believer in the retail business. The games that we primarily sell today, and have been selling, come on disc and they’re getting larger all the time. We think digital delivery or even Cloud versions of those games are still a ways away, so we want to continue to support that business. What we do in e-commerce is really multi-channel, making sure that consumers can buy those same games from us online and offline, or find information about those games online and then go buy them in our stores. So the more we engage our customers online, the more opportunities we create to introduce them to new kinds of games. Kongregate is a good example. You can’t buy those games in our stores, but we know that our customers love playing games like that. So CES is a way for us to understand what the opportunities are and see that larger tapestry of experience. Ultimately, how I see our stores is that they’ll eventually be one of many touch-points for how our customers will experience games.
But that’s an illusion, essentially, right? That most gamers are connect, are online. When in truth, a large part of the market isn’t necessarily plugged in…Was that a motivator for you to partner with companies like Microsoft and Sony to make DLC available in stores?
We want to make buying digital content really easy for consumers. We want to make discovering it easy for them as well. You’re coming in as a gamer and you’re buying Call of Duty, to have somebody be able to explain about the map-pack or whatnot – versus hearing about it elsewhere – is valuable. The delivery of that content can be friction-filled. You’re buying it on your Xbox; you’ve gotta go through the pain of entering your credit card information. We want to remove as much of that friction as possible. All of the integration, the work that we’re doing is about making it really, really easy, whether you come to the store or the webstore. Or, in the next year, you use your mobile phone. Or you log-on to your Xbox profile and in it’s your queue and ready to go…
Though to some extent you’re talking about connecting with a segment of your consumers that aren’t the hardcore elite. The mothers, fathers, etc...And certainly we’ve seen many a website come and go trying to bring in and educated the casual gamer.
We’re getting better tools for doing that. Our loyalty program will enable us to better understand those consumers’ preferences. Both implicitly – through what they’re buying – and explicitly through how we engage with them. Same thing online. The challenge in retail has been, before, the point-of-sale transaction is hard to connect to the individual. Now, with loyalty, we can connect those transactions to specific customers. The next challenge will be those who are buying games on behalf of others. So how do we manage things like wish lists, etc…Social tools…I think we’ll make more progress this coming year. A lot of this year has been about reinvesting into our online technology and preparing for this next stage of growth. For example, we had well over 100% year-over-year growth online, and a lot of those sales came from gift-buyers.
Let’s talk about Game Informer. In some sense, you have both a retail and an editorial voice. How do you strike a balance and avoid what I would imagine are some fairly unavoidable conflicts from a business standpoint?
I’ve been with the company for fourteen months and I’ve never seen any conflict. The company has done a very good job of staying editorially hands-off. There’s no review as to what the content of the magazine will be. In fact, we’re often surprised with what the cover is…One of the opportunities for us is to position Game Informer as a credible expert voice across GameStop. Today, it lives primarily as a magazine that you see at the store or get a subscription to…We’d love to see it have a voice on GameStop.com. Not to challenge their editorial integrity. We think consumers want to feel like this is not GameStop talking; this is another outlet with a separate perspective. And an expert perspective. We’re very, very careful. We think Game Informer has great insight into games because publishers know they can trust them. They’re not trying to tell a different story; they’re trying to give their own honest perspective on the games.
Where do you see GameStop in five years? What’s your vision?
I think we’ll have stores. I think what those stores will be doing is probably not only allowing consumers to buy, but to experience, games. I think you’re going to be able to interact with GameStop on lots of different devices. The analogy we use a lot internally is Netflix. Netflix comes bundled in my TV and my Blu-ray player and my Xbox, and we think we have an opportunity to create that kind of service. That no matter what you own, you can jump onto your GameStop app and discover new games with us.
Lastly, used games. Publishers claim a loss of profits that prevents them from taking risks on new IP. Obviously, you take a different view…
We vigorously maintain that publishers do in fact profit off of the used-game business because it promotes new game sales. Having said that, we continue to work with them and share data. I think we can do a better job to help others understand why “used” is good for the whole ecosystem, and not just for GameStop. But I think the numbers are clear. As for “used” five years from now, I think as long as there are physical discs that people can buy – just like any other physical product – there will be a used marketplace for those items. Now, as games move more digital, that’s a different question. What’s exciting about digital is all of the really interesting ways to monetize the content whether it’s free-to-play, micro transactions, subscription, purchase, rental, etc.
source
Chris Monfette: What kinds of opportunities does a show like CES offer to you? What are you looking for here at the show?
Shawn Freeman: Our digital strategy is ultimately to deliver games to consumers anywhere, any time and on any device. So for us, the show is an opportunity to see the new devices that can support games, meet with the companies that are creating those devices and the content for those games…We’ll meet with Motorolla, Panasonic…
Certainly over the past few years we’ve seen the rise of the digital, but physically, GameStop continues to grow, opening new stores, superstores, expanding, etc…
We’re still a big believer in the retail business. The games that we primarily sell today, and have been selling, come on disc and they’re getting larger all the time. We think digital delivery or even Cloud versions of those games are still a ways away, so we want to continue to support that business. What we do in e-commerce is really multi-channel, making sure that consumers can buy those same games from us online and offline, or find information about those games online and then go buy them in our stores. So the more we engage our customers online, the more opportunities we create to introduce them to new kinds of games. Kongregate is a good example. You can’t buy those games in our stores, but we know that our customers love playing games like that. So CES is a way for us to understand what the opportunities are and see that larger tapestry of experience. Ultimately, how I see our stores is that they’ll eventually be one of many touch-points for how our customers will experience games.
But that’s an illusion, essentially, right? That most gamers are connect, are online. When in truth, a large part of the market isn’t necessarily plugged in…Was that a motivator for you to partner with companies like Microsoft and Sony to make DLC available in stores?
We want to make buying digital content really easy for consumers. We want to make discovering it easy for them as well. You’re coming in as a gamer and you’re buying Call of Duty, to have somebody be able to explain about the map-pack or whatnot – versus hearing about it elsewhere – is valuable. The delivery of that content can be friction-filled. You’re buying it on your Xbox; you’ve gotta go through the pain of entering your credit card information. We want to remove as much of that friction as possible. All of the integration, the work that we’re doing is about making it really, really easy, whether you come to the store or the webstore. Or, in the next year, you use your mobile phone. Or you log-on to your Xbox profile and in it’s your queue and ready to go…
Though to some extent you’re talking about connecting with a segment of your consumers that aren’t the hardcore elite. The mothers, fathers, etc...And certainly we’ve seen many a website come and go trying to bring in and educated the casual gamer.
We’re getting better tools for doing that. Our loyalty program will enable us to better understand those consumers’ preferences. Both implicitly – through what they’re buying – and explicitly through how we engage with them. Same thing online. The challenge in retail has been, before, the point-of-sale transaction is hard to connect to the individual. Now, with loyalty, we can connect those transactions to specific customers. The next challenge will be those who are buying games on behalf of others. So how do we manage things like wish lists, etc…Social tools…I think we’ll make more progress this coming year. A lot of this year has been about reinvesting into our online technology and preparing for this next stage of growth. For example, we had well over 100% year-over-year growth online, and a lot of those sales came from gift-buyers.
Let’s talk about Game Informer. In some sense, you have both a retail and an editorial voice. How do you strike a balance and avoid what I would imagine are some fairly unavoidable conflicts from a business standpoint?
I’ve been with the company for fourteen months and I’ve never seen any conflict. The company has done a very good job of staying editorially hands-off. There’s no review as to what the content of the magazine will be. In fact, we’re often surprised with what the cover is…One of the opportunities for us is to position Game Informer as a credible expert voice across GameStop. Today, it lives primarily as a magazine that you see at the store or get a subscription to…We’d love to see it have a voice on GameStop.com. Not to challenge their editorial integrity. We think consumers want to feel like this is not GameStop talking; this is another outlet with a separate perspective. And an expert perspective. We’re very, very careful. We think Game Informer has great insight into games because publishers know they can trust them. They’re not trying to tell a different story; they’re trying to give their own honest perspective on the games.
Where do you see GameStop in five years? What’s your vision?
I think we’ll have stores. I think what those stores will be doing is probably not only allowing consumers to buy, but to experience, games. I think you’re going to be able to interact with GameStop on lots of different devices. The analogy we use a lot internally is Netflix. Netflix comes bundled in my TV and my Blu-ray player and my Xbox, and we think we have an opportunity to create that kind of service. That no matter what you own, you can jump onto your GameStop app and discover new games with us.
Lastly, used games. Publishers claim a loss of profits that prevents them from taking risks on new IP. Obviously, you take a different view…
We vigorously maintain that publishers do in fact profit off of the used-game business because it promotes new game sales. Having said that, we continue to work with them and share data. I think we can do a better job to help others understand why “used” is good for the whole ecosystem, and not just for GameStop. But I think the numbers are clear. As for “used” five years from now, I think as long as there are physical discs that people can buy – just like any other physical product – there will be a used marketplace for those items. Now, as games move more digital, that’s a different question. What’s exciting about digital is all of the really interesting ways to monetize the content whether it’s free-to-play, micro transactions, subscription, purchase, rental, etc.
source
