The Money Making Game #7: GameStop Goes Digital

We certainly have no problem getting caught up in the fun of playing games, but the people who create them have their pocketbooks to worry about, too. In this column, finance expert and GameSpy contributor Chris Morris guides you through the tricky corridors the gaming industry’s financial side, touching on big-time business decisions and how they matter to the common gamer.

The king of the brick-and-mortar gaming world is finally embracing the digital. GameStop’s recent purchases of the Impulse digital distribution service and Spawn Labs streaming service won’t solve all of its problems, but it sets a course for the company as it prepares for the coming transition — and it gives investors some much needed clarity into GameStop management’s long-term thinking.

These days, GameStop sees annual digital revenues of $290 million from video games. As it expands, though, it expects those numbers to hit $1.5 billion by the end of 2014. “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,” says Tony Bartel, president of GameStop. “Both of these programs are designed to sell more of the games we sell today.”

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