GameStop May Develop Tablet Device

Apr 07, 2011

Considering that Amazon introduced Kindle and Barnes & Noble
rolled out Nook to spur e-book sales, it probably shouldn’t seem crazy that
GameStop is considering developing its own tablet computer for gamers.

Bartel, president of GameStop, told Gamasutra this week, "If
we can work with our partners and the OEMs and they come up with a great tablet
that is enabled with a great gaming experience and coupled with a bluetooth
controller, then there’s no need to go out and develop our own. But, if we
can’t find one that’s great for gaming, then we will create our own."

Bartel said tablet devices represent "the next explosion in the gaming

Mr. Bartel’s revelation was something of an aside to the news
that GameStop had purchased the digital distribution service Impulse along
with Spawn Labs, a streaming service that offers, according to the Technologizer website,
a "Slingbox-like" device that allows consumers to broadcast video
games to personal computers and PS2, PS3, Xbox, Xbox 360, and GameCube. It
is not compatible with Wii.

"Our customers are beginning to consume games in a hybrid manner, both
physical and digital, so we are becoming a hybrid company to meet their needs," Mr.
Bartel told Gamasutra. "Both of these programs are designed to
sell more of the games we sell today."

GameStop plans to work with internet-enabled
television makers to offer the service, but the initial focus will be on tablet

"We really believe that’s a chance for us to lead the tablet playing field," Mr.
Bartel told Gamasutra. "Just like people create [lower-priced,
immersive] games for the PC, we think people will begin to create immersive
games for a higher price for the tablets. Someone needs to offer those games,
and that’s something GameStop will be the leader in doing."

"GameStop management is doing just about everything right," Michael
Pachter, an analyst with Wedbush Securities, told CNBC. "Both acquisitions
[enhance] the overall level of GameStop service, allowing it to better retain
its high value customers over the long term."

One of the reasons GameStop
chose to acquire Impulse was because it felt the service would be able to integrate
its PowerUp rewards program. According to CNBC,
over eight million have signed up for the program over the past eight months
with five million paying $15 per month for GameStop’s "pro service." The
chain expects to reach up to 15 million members by the end of the year.

members spend $65 more on average than non-members at GameStop and shop the
chain twice as often.

"PowerUp [is] the new ‘secret sauce,’" Colin Sebastian, an analyst
with Lazard Capital Markets, told CNBC. "We believe [the program]
can help GameStop remain differentiated in the retail market, as well as provide
a conduit for jump-starting future digital initiatives."

Discussion Questions: What do you think about GameStop’s digital initiatives and its potential move into manufacturing its own tablet device? Do you agree that tablets represent the next big thing in gaming?

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12 Comments on "GameStop May Develop Tablet Device"

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Dan Berthiaume
Dan Berthiaume
11 years 1 month ago

It’s a good idea in theory but it always dangerous when companies step outside their area of expertise, especially when their margins are as tight as a retailer’s and the product is as complex as a tablet computer. GameStop might be better off partnering with an established tablet maker to release a co-branded special gamer’s edition of an existing product.

Fabien Tiburce
Fabien Tiburce
11 years 1 month ago

Thanks to commoditized components and open-source software (Android, Linux, Java), just about anyone can launch a tablet, reader or console these days. Unfortunately, it no longer is about the tablet, the hardware or even the operating system. It’s about the ecosystem: the programming, access to third-party applications, services and data. In other words “Company X announces a tablet” is hardly cause for celebration. When GameStop announces who they are working with and what the ecosystem will look like, then we can take bets on the success of the initiative. In the meantime, godspeed GameStop.

Liz Crawford
11 years 1 month ago

While GameStop certainly has the audience for it, the danger is the level of expectation. These kids (including adult kids) expect a LOT from their technology…not to mention staying right on the edge of break-throughs as well. I wonder if GameStop can handle it.

The question is–is the manufacturer behind the private label committed to the highest levels of sophistication, on an ongoing basis? If so, then it’ll work. If not, it could really hurt their reputation.

Kevin Graff
11 years 1 month ago

There’s an expression we live by here … “do what you do best, and subcontract out the rest!”

Somehow, I think that certainly applies here. GameStop is good at what they do … but design and manufacturing? That’s a big leap of faith.

They’re probably right on with what they believe needs to happen with a tablet, but as noted above, are best to look for a co-branding opportunity for their tablet dreams.

Bill Bittner
Bill Bittner
11 years 1 month ago

It seems there are two distinct business models evolving for games. There are those games that have wide distribution and run on many different platforms and those which develop almost a cult following with intense players who build custom platforms that give them a hardware advantage over their opponents.

Most of us lie somewhere between the casual user who plays a game on their cell phone while waiting for a plane and the intense gamer who is entrenched under headphones and viewing a 50 inch screen. It seems tablet based gaming (that would require custom hardware) is more directed to the enthusiast. I don’t know if there are sufficient numbers to support a completely unique platform, but maybe an enhanced version of a common tablet could meet the price point required to reach gamers.

Gene Detroyer
11 years 1 month ago

This is a divergence that will be relatively short term. Electronic devices will continue to converge as each device provides more and more application. As those devices converge, the leader will be the tablet maker that makes the best performing tablet. It will not be GameStop. Their product will be an also-ran and a disappointment to the company, and will not get the attention to keep up the technology marketplace.

W. Frank Dell II, CMC
11 years 1 month ago

I predict short-term success. We have had hand-held game products with games on cartridges for years. Pads are the future. Unless GameShop can create unique controls over the content, others will take the market away. How easy would it be for all the pad makers to have a game version i.e. do everything a pad does today plus play games? Just like the personal computer has game versions, so can the pad.

Larry Negrich
11 years 1 month ago

Perhaps a bit outside of its core competencies but likely a step they should take. OEMing this device with their brand would be a good way to get a firmer grip on the distribution of their products and put the store in the hands of their best customers. The device needs to be high quality and rugged to meet expectation of these high-value customers.

Shawn Harris
Shawn Harris
11 years 1 month ago

I think this is a great idea. The games drive the industry, with GameStop’s recent acquisitions to enable game streaming the endpoint doesn’t matter, so why not have their own device in play? Cheers.

M. Jericho Banks PhD
M. Jericho Banks PhD
11 years 1 month ago

This is so cool! I’m definitely not a gamer of any stripe whatsoever, but this announcement is such a no-brainer! John Madden, are you listening? Didn’t Nintendo just introduce an advanced handheld game device? GameStop should move forward with haste, but definitely should not manufacture their own tablets. Leave it to the experts.

Jerry Gelsomino
11 years 1 month ago

I think R&D in this area, even getting the buzz being talked about the company, is great. There are incubator labs all over the US that are working on new technologies so that even if GameStop’s own initiatives don’t pan out, they will draw the attention of inventors, being challenged by the company’s initiatives. Yes stick what you do best, but threaten others that if you won’t come up with the answer, I will!

Ed Rosenbaum
11 years 1 month ago

GameStop has a target and niche market that makes this a strong forward step for them. Yes, apps on other instruments will work well. But having their own makes this a big win for them once they decide the course to take.


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