GameStop is opening 400 retail video game stores a year. But it’s not blind to the fact that digital distribution of online games could threaten that physical store business.
That’s why the nation’s biggest game retailer bought Jolt Online Gaming last year and today launched its first free-to-play online game. The first title is Legends of Zork (right), a fantasy online game based on a classic game franchise, and it one of a billion such games online.
But this one stands a real chance because it will get exposure in every one of the thousands of GameStop stores in the U.S. Gamers can see the game in kiosks in the stores and enter a Zork-related sweepstakes to win a full year of free video games. With any used game trade-in, they can also pick up a free promotional code for the game at any U.S. GameStop store. They can then take the card and register to play the game online. Each card entitles a player to a limited edition “Steampunk Knight” character in the online game. This kind of marketing and distribution shows that it’s possible to marry both online and physical retail sales efforts.
“This takes promotion to another level,” said Dylan Collins, co-founder of Dublin, Ireland-based Jolt. “The important thing is access to the retail customer.”
The project is the brainchild of Collins, a serial entrepreneur. He started the company in mid-2008 and sold it to GameStop last year. Jolt, which has 30 people, is now operating as an independent subsidiary.
Jolt is following in the footsteps of online game companies such as Bigpoint and GameForge. Those companies let players play browser-based online games for free, but charge player for virtual goods purchases. This online game business will have a huge marketing edge, since 500 million customers walk into GameStop’s 6,450 stores each year.
Of course, there is some tension here. Grapevine, Texas-based GameStop has already upset game publishers by selling used games at high prices almost immediately after brand new games launch. That cuts into game publisher profits because GameStop doesn’t share revenue from those used game sales with the game publishers or creators. With Jolt, GameStop is competing with game publishers, offering its own exclusive GameStop titles.
Hence, publishers would love nothing more than to shift more of their business online, bypassing retail entirely and selling games directly to consumers. That’s why game companies are supporting digital distribution businesses such as Valve’s Steam and OnLive, which is launching a games on demand service in June.
Jolt Online Gaming has also launched Utopia Kingdoms and plans another game, Playboy Manager. Beyond that, Collins said there are two more games in the works.
“We’ve got a hell of an opportunity and we have a lot of plans for this year,” Collins said.