In short, the company cuts everything digital.
As the focus of sales shifts to online and digital, physical retail issues are becoming a major issue. Putting it all together in the current COVID pandemic is just a pain. GameStop, the last major retail chain focused on video games, has had to close multiple stores and sales are declining, so it’s no wonder these issues. But with the announcement of a new partnership with Microsoft, retail chains don’t seem to be declining without some fight.
As reported by DOMO Capital, GameStop has signed a contract with Microsoft to share downstream revenue from digital sales on the Xbox system sold by GameStop. The exact details are unknown, but retailers seem to make some money from all the digital content they sell and pull their customers into the “Xbox ecosystem.” This is clearly the upcoming Xbox Series X and Series S, but probably also includes the Xbox One or Spare 360, but the exact details haven’t been revealed at this time. There are many unanswered questions, such as whether Game Pass revenue will be counted. These particular details may never be shared.
It’s an interesting move for both sides. GameStop undoubtedly sees this as a move to heal some of their financial wounds, and Microsoft is probably seeing an opportunity to push their system to people who are still shopping in-store. It’s still unclear if it will bring either greater benefit, but it’s all just as creative partnerships.
Today, $ GME and @DOMOCAPITAL have signed a contract with $ MSFT to share all downstream revenue (ie, digital downloads and digital content) from all devices that GameStop brings to the @Xbox ecosystem. Confirmed that is included. GameStop is now meaningfully digitally involved.
— DOMO Capital Management, LLC (@DOMOCAPITAL) October 14, 2020
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