Thursday, August 21, 2008

GameStop No Threat From Digital Distribution, Plans For PS3/Xbox 360 Price Cuts

On the heels of a record-setting second quarter, retailer GameStop says that its higher full-year guidance factors in $50 price cuts for both Xbox 360 and PS3 in the holiday season.

The retailer is unconcerned, says COO Dan DeMatteo, about Sony's digital distribution push -- nor the just-announced 160 GB PS3 designed in part to accommodate and encourage more downloadable games.

In a post-results analyst call attended by Gamasutra, DeMatteo called the revenue stream for digital distribution "pretty insignificant" and suggested that the new, larger-capacity PS3 is largely a move on Sony's part to encourage the console's use as a "media hub."

The assertion lines up with comments made by Sony president and CEO Jack Tretton, who at the time of the announcement also pegged PS3 exclusives on the PlayStation network as a motivating factor in the expanded storage space.

"We don't expect full distribution of new games to be a threat due to game size," DeMatteo says, also citing long download times as a barrier for the format.

As for the Wii, GameStop says it's still seeing supply constraints in the face of strong demand, even though sales are gentling in the summer. "Three months ago, whatever we got into our stores would sell in two days," DeMatteo says.

"Now it's three or four days, but it's still extremely strong for a system that's been out... a year and a half. Demand is really very strong... it's going to continue, and there will still be shortages throughout the year."

However, GameStop anticipates that Wii Fit will be even harder to come by than the Wii itself over the holidays. "It's in very short supply," DeMatteo says. via GamaSutra

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Author & Editor, Jason Kiwaluk

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