Paul Raines, CEO of GameStop, doesn’t seem to be worried about the whispers of inevitable obsolescence regarding the medium his entire company depends on to resell. As he tells Fortune Magazine in a new interview, “Disc-based games will be around forever.”
Explain how, Paul. He says. “The market has seen physical music sales down 50% from its peak and physical movie sales down 60% from its peak, but even in a doomsday scenario, disc-based games will be around for a long time. I see a complimentary business where we sell discs plus download like the current console mode. Virtual reality games will also likely follow this model.” I repeat: explain how, Paul.
Despite the naive wording there, Raines isn’t stupid enough to put all of his eggs into one basket. “We’re trying to drive an internal rate change that’s faster than the world around us,” he told Fortune. “We have a pretty healthy digital business, which includes downloadable content (DLC) for PC and console games, full game downloads, Steam points cards and currencies, and casual games site Kongregate’s online and mobile games sales. We see that as a $1 billion business this year.” Note the language he used: “see that.” It’s easier to project a number onto a year that hasn’t finished yet than tell Fortune how well those silly “redeem for digital content” cards sold in 2014.
It’s worth pointing out GameStop has been making other investments. It purchased the novelty retailer ThinkGeek last June, and a larger portion of its retail space has been devoted to game-centric merchandise like T-shirts and watches with game characters on them. There’s also a bigger focus on reselling phones and tablets, as well as a bigger rack of Skylanders, Disney Infinity and Amiibo toys. Deep down Raines may know tough times are ahead, even if he won’t admit it to reporters.