As the song says, “…welcome to the new age.”
Someone should probably tell GameStop that if you stand in the way of a moving train, you’re not going to stop it, you’re just going to get run over. This particular train’s name is called “digital,” and its barreling full-steam down the track. GameStop on the other hand is still struggling to jump onboard, as it speeds past them. Naturally, with a trend like dumping physical media in lieu of virtual content taking hold, a brick and mortar store like GameStop begins to get a bit nervous about its future. It will take a serious course correction for them to stay afloat, as they have no choice but to evolve. Changing with the times is the only thing that will allow them to continue on as a viable business.
The problem is, they just don’t get it. Recent comments made by those within the company highlight their static, old-fashioned thinking that’s destined to doom them.
Matt Hodges is the VP of investor relations at GameStop, and also the man who made statements recently that simply blow my mind. If there is another in the industry who seems less in-touch with current trends, please introduce me to him. At least, that’s what I took away from his recent announcement regarding the company shutting down the R&D division for their in-house streaming venture. For those who may not be familiar with an outfit called Spawn Labs, they are a group that GameStop bought in 2011. Their job was to explore the merits of launching a cloud-based streaming service for the retailer. Apparently they failed.
After being unable to crack the nut (or perhaps getting intimated at the idea of releasing a second-rate service compared to other mainstay consoles), they announced yesterday they were shutting it down. Not all that surprising in and of itself, the comments regarding “what consumers are ready for” that followed is what I found off-putting. “While cloud-based delivery of video games is innovative and potentially revolutionary,” Hodges states “…the gaming consumer has not yet demonstrated that it is ready to adopt this type of service to the level that a sustainable business can be created around it." he said.
Oh really? So WE’RE the reason you’re half-assed attempts at staying relevant fell through?
I have to call BS on this immediately. In fact, calling uber-BS would be more appropriate. Based on Mr. Hodges assertions, he’d lead us to believe that after years of extensive research and market analysis, they’ve come to the conclusion that we gamers aren’t prepared for their ingenious vision. What of virtually every indicator pointing to the exact opposite conclusion (with smartphones and consoles centering on consumer’s appetites for on-demand streaming and cloud-based services)? Am I really supposed to take the so-called results of this “study” as anything more than a company whose antiquated business model is about to make them a dinosaur? It’s no wonder they’re attempting to put the brakes on. To me, I lovingly equate Hodges to the drug dealer who offers you one last bump after telling him you’ve decided to go to rehab. After all, he’s got a vested interest in keeping you coming back for more. If you don’t, where does that leave him?
I’ve done some introspection recently and tried to determine why I’m so unbelievably irked by the “…not yet demonstrated it’s ready” remark. Frankly, I find it to be insulting for two good reasons. The first is how he shifts blame from their failures to us. He implies that the abandonment of their venture stems from the inconvenience inherent in our buying habits, rather than their shortcomings in developing a service we find appealing. Which brings me to the second point: the product itself. Hodges clearly has a chicken or the egg problem with his thinking. It’s not our responsibility to prove we’re ready FIRST, but rather theirs to bring an innovative concept to the market and allow us to vote for which we prefer (via our gaming dollars). Sony’s much anticipated PlayStation Now service (which GameStop does acknowledge is a viable window of opportunity for them) highlights how this can be done the right way. They’re seemingly unafraid to blaze a trail. GameStop would do well not to dismiss key aspects of the digital revolution (like the cloud) so cavalierly.
Otherwise, they may find their business will soon evaporate into a real cloud and rain down on everyone else.