While not enjoying the same vast audience as traditional brick-and-mortar stores, digital distribution has made noticeable strides in recent years.
On the video game front, the introduction of consoles with built-in memory this generation (even the Nintendo Wii boasts a small amount on internal flash memory) allows developers of all sizes to upload both small original games and full-fledged retail releases. Game developer Valve has found success running its own digital sales platform Steam that sells in-house titles and those of myriad third-party developers. And OnLive allows subscribers access to new releases via the cloud.
Video game retailer GameStop must see big things in the future for online digital video game distribution. The Texas-based company bought up streaming services Spawn Labs and Impulse -- both specializing in digital distribution -- last week.
The deal so far only covers Spawn Labs, with the company's buy-out of Impulse months away from being finalized according to GameStop. The end goal, says the retailer, is a well-rounded, comprehensive method of delivering video games to a constantly evolving legion of players across numerous platforms.
"Our customers are gaming in many locations and on many devices, and we need to deliver the same great immersive experience that they have come to expect," GameStop President Tony Bartel said. "Spawn Labs and Impulse provide a customer-friendly and publisher-friendly way for us to accomplish this."
Spawn Labs' penchant for streaming technology and Impulse's history as a digital distribution platform are good compliments. GameStop clearly wants to be prepared for what the next few years may bring for online game distribution, even as the company posts record sales numbers solely from its traditional business model.
What does this mean for the two companies and their new owner?
For GameStop, it's quite clear: bigwigs are concerned that in the years to come their bread and butter -- physical media -- may be impacted by a growing interest in digital content. Acquiring the two companies speaks to that fear, and the determination to be one step ahead.
The company has a history of buying up other businesses to strengthen its position as a premiere player in the new and used video game software market.
Back in 2000 when the print industry was still still thriving GameStop bought out Funcoland, earning them the rights to gaming magazine Game Informer. The magazine currently boasts a circulation of over 4 million subscribers. In 2005, the retailer purchased its key competitor EB Games. Last year GameStop acquired Kongregate, a social gaming site specializing in free-to-play games, and purchased stock in the similar Jolt Online Gaming in 2009.
Spawn Labs currently hosts the press release announcement of the acquisition and little else. Unsurprising, as work incorporating the company into GameStop has already begun.
Impulse, on the other hand, is still active. Acknowledging the looming merger, an FAQ on the site promises nothing will change: "For the foreseeable future, nothing will change for customers. There will be no disruption in service to existing or newly created accounts. Impulse will continue to function as normal for existing and new customers. Your current purchases will continue to be available through Impulse, Inc."
