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Apple Takes Another Bite: GameStop Enters The iOS Business

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Any doubters left that Apple and the smartphone gaming market it jump-started is eating Nintendo? In something more than a simple sign of the times, nationwide games retail chain GameStop just started taking used iPods, iPhones and iPads for credit at store, apparently in preparation for full-scale Apple retail push. Call this yet another clear indication that mobile media is carving much more than a niche from an existing market.

These guys see the writing on the wall. The console market is in between generations with an uncertain future for its next-gen hardware. Nintendo's recent introduction of a 3D version of its handheld DS line slashed its high price in order to goose a disappointing market. And high-end, high production value game sales for existing consoles are down, while inexpensive touch screen trifles like "Angry Birds" become pop culture phenoms. I passed an FYE store this weekend that had stuffed birds and pigs from the game for sale in the window. Seen many "Halo" or "Resident Evil" stuffed play dolls in your mall crawl lately?  

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Since all mobile game distribution is via digital download, a bricks and mortar retailer like GameStop has to find some way into this market. There are only so many iTunes gift cards a store can sell. According to a report from 9to5Mac, GameStop announced at a trade conference last week it would shortly begin selling iOS devices. iPhones, iPads and iPods will be available right next to the devices whose markets the smartphone are nibbling.

We have to imagine these moves are all just preambles to GameStop becoming an Apple reseller when the iPhone 5 hits next month. The company has made a small mint from reselling used hardware and software, however, so it knows what it is doing, and its customers are well acquainted with the trade-in model. 

Of course GameStop's move acknowledges what was already apparent: smartphones and the app economy are fundamentally changing another market -- gaming -- just as surely as it will publishing and retail. There are some interesting opportunities that GameStop's involvement with Apple devices and smartphone gaming open up, however. As effective as Apple and the App Store may be in merchandising apps, GameStop might offer an interesting way to get the app economy into retail. Its deft use of in-store merchandising, co-marketing deals and multi-platform promotions could open up new channels for sponsors and perhaps even platforms for exposing a broader range of apps. As marketers learn to partner with this incredibly powerful mobile entertainment ecosystem, key players from the traditional game world like GameStop could help brands get into the mobile game game.   

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