While digital downloads are growing increasingly popular among gamers, GameStop isn’t worried about the impact it will have on physical sales, suggesting the retail market will be around “forever.”
Speaking with Fortune, GameStop CEO Paul Raines says video games won’t follow other media in terms of a physical decline, and virtual reality will only help matters:
Disc-based games will be around forever. The market has seen physical music sales down 50% from its peak and physical movie sales down 60% from its peak, but even in a doomsday scenario, disc-based games will be around for a long time. I see a complimentary business where we sell discs plus download like the current console mode. Virtual reality games will also likely follow this model.
In 2014, digital sales accounted for $948 million of GameStop’s $9.3 billion in revenue. For 2015, Raines expects digital to reach $1 billion.
Looking at the virtual reality market, Raines referenced analysts who said “there could be 10 million VR users by the end of 2016, and there are hardware forecasts of $30 billion by 2020.” On GameStop’s end, he added, “We’re going to be the destination for VR.”
Wedbush Securities analyst Michael Pachter also looked to GameStop’s future in an interview with MCV, saying he thinks it will be a long time before they are in trouble:
I think the console death will take decades. That means that GameStop has at least another 20 years to sell DVDs. I think that the decline in physical game sales hurts GameStop the least, as Amazon and Best Buy customers are far more inclined to buy online than GameStop customers, due to the latter’s predominant position in the used games business.
Earlier this month, Pachter said the console installed base is as big as it’s ever going to get.
[Source: Forbes, MCV via Games Industry]
