GameStop will now receive a portion of sales made on Xbox products within its stores, multiple sources have confirmed. This new GameStop digital revenue deal means that the retailer has secured a long-term income stream for next-gen.
Last week, a Microsoft GameStop partnership was announced. A major portion of the deal was the integration of Microsoft's productivity stores in GameStop's systems, both at the corporate and store level. However, not much was known about what benefits there would be to the retail side of the partnership until now. It has since been revealed that GameStop will receive a portion of digital revenue on products sold through its stores, effectively growing its digital presence in a substantial fashion.
How Will the GameStop Digital Revenue Deal Work?
No specific numbers on the GameStop digital revenue deal have been confirmed just yet, but analysts have pinned down some details and made some estimates.
"Today [GameStop] confirmed with [DOMO Capital Management] that the agreement with [Microsoft] includes revenue sharing on all downstream revenue (i.e. digital downloads and digital content) from any device that GameStop brings into the [Xbox] ecosystem," read a tweet from DOMO Capital Management. "GameStop now meaningfully participates in digital."
This claim was corroborated by investing website Seeking Alpha who confirmed it with Gamestop; in both cases, it refers to a single sentence from an earlier press release on the partnership:
GameStop and Microsoft will both benefit from the customer acquisition and lifetime revenue value of each gamer brought into the Xbox ecosystem.
It's important to note that this isn't a one-off, either — as the press release excerpt notes, these are for lifetime sales. If you subscribe to Xbox Game Pass Ultimate through GameStop, the retailer will get a percentage of the revenue from your membership each and every month. They will also get money on digital game purchases madeo n the console it appears.
In practical terms, this means that GameStop would make less money in the short term should a customer opt to purchase a console through Xbox All Access instead of buying it outright. However, they could potentially make more money over the lifetime of that Xbox All Access membership, ensuring a small but steady revenue stream on a membership that customers aren't likely to cancel.
This portion of the partnership further incentivizes GameStop to move Microsoft's digital products. Anyone who has set foot in a GameStop knows that they love to push subscriptions to its PowerUp Rewards program — don't be surprised if they start asking you about Xbox Game Pass Ultimate at the checkout counter, too.
Do you think this new GameStop digital revenue stream will be a boon for the retailer? Would you be more likely to buy digital products at a physical store? Let us know in the comments below!