GameStop and Microsoft have signed a multi-year agreement that allows the video game retailer to cut back on any digital purchase made on future Xbox consoles sold directly. Ars Technica Reports.
The new revenue sharing agreement is designed to give GameStop a percentage of all digital sales made on these Xbox consoles, including digital downloads of full games and DLC, in-game microtransactions and subscriptions (which appear to include things like Xbox Live Gold and Xbox Game Pass).
The biggest question is how much of a cut GameStop gets. Neither of the two investors did that Ars Technica Sources have specific answers; GameStop has not yet responded to a request for comment. A Microsoft PR representative said The edge“We have an incentive structure with GameStop like we do with many of our partners across multiple channels,”
Also unclear: whether the deal only applies to games or other purchases of digital content (such as films, TV shows and music) or whether used consoles that GameStop sells on to new customers will be included in the digital revenue sharing.
Video games have tended to be digital shopping for years, much to the horror of retailers like GameStop, who make their bread and butter selling (and reselling) physical copies of games and consoles to customers. And the upcoming next-generation consoles raise this problem even further: Both Microsoft and Sony offer pure digital options in the form of the Xbox Series S and PlayStation 5 Digital Edition, which completely cut retailers like GameStop from the game market.
Benefiting from a cut in those sales could help mitigate the slowdown in sales from digital-only sales, much like the Universal / AMC deal announced earlier this year that allowed the theater chain to cut Universal films that were showing early digital retailers.
Of course, this assumes that the GameStop cut is a significant portion of the money. An investor speculates that the revenue sharing was merely a sweetener to GameStop’s agreement to use Microsoft’s cloud infrastructure and Surface tablets, rather than the core of the business. Hopefully, GameStop’s next earnings report will help shed some light on the details.