Here's a good article that goes into some detail on the Gamestop / Impulse / Stardock team up.
http://www.joystiq.com/2011/03/31/stardocks-brad-wardell-talks-about-selling-impulse-to-gamestop/
I'm relatively neutral on this whole thing but let me give a real world example where this can turn out positive.
Last year the company I work for was purchased by a giant international company. My company was a respected and trusted expert in our field which is why it was purchased. The purchaser, let's say, was lacking in this category. Now alot of anxiety was caused, namely around job security, but once that was nailed down it was the issue of "Clash of Cultures." Would the less respected yet giant culture dominate and destroy the respected brand and culture of our company?
What's actually happened is personnel from my company were placed into key positions of the new merged entity. The culture that made our medium-sized business successful started to change the culture of the new merged entity for the better. Picture a bigger fish eating a little fish and the little fish gets the last laugh by eating the big fish from the inside out.
It's certainly possible Gamestop could just wreck everything Impulse. On the other hand, it's also possible they bought what Brad had to offer for the purpose of providing investment that Brad could not or did not want to provide. Maybe they have no plans at all beyond basic synergies and cost savings? Maybe SD's culture will win the day? Too early to tell. Flip a coin. I highly recommend everyone take a deep breath, read and listen to Gamestop's announcement, and pay particular attention to who will be calling the shots of the new division. Are key Stardockians going to call the shots or are they bringing in their leadership?
I'm wondering how someone willing to spend a whole lot of money to get in a market they left is a 'big threat'.
That's resources that would not have been in the PC gaming market if they'd continued on their existing path.
I don't know if Stardock even had the resources to expand Impulse in the ways I wanted (voice chat and other functional weaknesses compared to Steam) but I know I wasn't seeing any progress.
I personally see nothing positive about this, every Gamestop/EB store I've been to (which is a hell of a lot, I've moved a lot) have few PC games, and the staff were rude and condescending as hell. The few times I tried to pre-order games through them they screwed it up every time and their phone and email support staff were as rude as the people in the Store.
I end up every time having to go through someone else. In fact the last game I tried to pre-order threw them was Star Trek Online, they screwed up at every turn so I went with impulse instead, even thought the pre-order bonus was worthless.
I continue to order stardocks games through impulse (or directly from Stardock if i can) since the the only way I can get them right now but that it, I refuse to give Gamestop one more penny of my money.
Honestly, why I think Gamestop did this:
a) Publishers are now putting online codes in their codes to get $10 out of folks who buy used. I suspect that next-gen, games will be tied to your account like Steam, and non-transferable. Gamestop is screwed if this happens, there goes most of their margin.
Gamestop's best bet is the PC market. Impulse is the largest one that could be bought, and they made Stardock an offer they couldn't refuse.
My big worry with Gamestop is not so much them mistreating the service, it's them going belly under in 10 years time. Circuit City went bankrupt quick. That said, Gamestop's Rep also worries me.
I do know the more I think about this- why couldn't Stardock just do what Gamersgate did and spin off their DD into a subsidiary? GG is where I'll give my dollars now, though I'll keep Impulse for Stardock games, though now I'll be nagging for GG versions of future releases so I can dump Impulse. If SD putts their games on their own servers, I'll order that way.
But one huge red flag, thats worth a whole bunch of little red flags was raised when I learned that it was Gamestop who was the buyer. They are big time responsible for doing the sorts of things that Brad says is threating the industry. Why Gamestop? They got big money and industry influence sure. And by way of brand recognition and existing customer base, they are in position to give steam some near term competition. Stardock needed more time to grow its base. But fortuitous events in the industry gave Stardock and Impulse opportunity to expand its user base simply by continuing to do those things which set them apart from their competitors. I thought they were on the right track and that growth would begin to come exponentially. Well thats not to be it seems. But Gamestop!? Their track record runs the wrong way. They profit off an industry which they undercut by diverting revenue away from the actual content providers. When I read Brads articles on the negative aspects that retailers have on the PC gaming industry, Gamestop comes readily to mind.
Brad explained a reason for selling Impulse was that it demanded resources he was unwilling or unable to give. Fine. Its also fine if he wanted to build it up for the purpose of selling it from the get go. It's not my business how he runs his... except for the small fact that I have something to lose. He has sold the ownership of a service which controls the validation keys to a software usage license which I have paid for. And he has sold it to an outfit which I have firsthand reason to distrust. And a little bit of time spent researching gives me even more reason to distrust. So I am taking a personal interest in this decision of his. I've got something to lose here.
I've probably said too much on this topic. I'm a bit disappointed if this is true. I thought Stardocks Impulse was going to bring noteworthy change to the industry while providing an ESD I could trust. I'll wait and see if there is any news tomorrow. Then decide where to go from here. Things were so much simpler when the keys to my game were in the hands of someone I trusted. And the future of middle market old school TBS looked a bit brighter than it does now. There is still Paradox Games though :~)
Consider reading this:
http://wallstreetpit.com/69246-earnings-scorecard-gamestop-corporation
Gamestop dominates (eg completely dominates) the used video game market. Other companies have been attempting to cut their profits (amazon and best buy, to name a few). The PC game market is substantially smaller than the console market. That said, its an extremely logical move to develop an online distribution platform. Why would I shop somewhere else if I can trade all of my console games in for credit at gamestop and get great deals on my online games there as well. Perhaps (as Brad mentioned some time ago), the time will come where you can "trade in" a pc license. And as we are seeing companies starting to require an "online pass" to play their games, then it only makes sense that gamestop might even encourage this practice (as counterproductive as that may sound). If you could sell your online pass BACK to gamestop when you are done with a game and then gamestop could sell that pass (after contributing some fee to the publisher), it would be a nice win win situation. Anyway, a process like that wouldn't necessarily need to be handled via impulse, but some system for managing keys would be needed. Anyway, all in all, its a solid distribution platform. Stardock gets (likely) a deal where they can publish through impulse at no or reduced cost - perhaps even some sort of profit sharing... plus, likely, a nice lump sum of some sort, and now we are back to having a stardock that is focused on creating great games and software - WITH additional resources focused on development.
Circuit City's financial situation was SUBSTANTIALLY DIFFERENT than Game Stop. Unless I'm misreading this, gamestop's revenue in 4th quarter 2011 was 3.6 BILLION dollars. The business model is brilliant. Offer to buy video games from folks at cut rate prices for credit or (less) cash. Then they buy software from you. Process continues with gamestop making, what, 15-40 per trade in as long as it sells. Multiply that number by millions of folks doing this multiple times per year and... hmm.
Anyway, I can't imagine, in any way, shape, or form gamestop going under short of something apocalyptic.
console publishers making the next-gen of consoles resale proof would be just that for Gamestop, and I put the odds of that happening at 80%.
That said, I think consoles have peaked as a business model.
No word of this on Gamasutra, I'm calling April Fools.
The news was posted on gamestops corporate website. http://phx.corporate-ir.net/phoenix.zhtml?c=130125&p=irol-news&nyo=0
or here: http://investing.businessweek.com/research/stocks/news/news.asp?ticker=GME:US
http://www.forbes.com/2011/04/01/gamestop-acquires-spawn-labs-impulse-marketnewsvideo.html
If you think the board of gamestop would stand for an April fools joke that would impact stock prices, you are very mistaken.
So your thought is that games will no longer be published on consoles or that there will not be a new next gen console? I personally think that all we have seen is that M$ and Sony have increased the life cycles of their current hardware once they realized consumers weren't exceedingly interested in shelling out $200-$500 every 2 years for the latest and greatest. This is actually a huge win for the consumer and developers. But if you don't think that Sony and M$ (most likley M$ first) are working on a next gen system I'd argue. There's alot of money to be made here. And even without releasing a brand new machine, both companies launched updated versions of their consoles along with new peripherals.
That said, it's not in the best interest of any company to make a console that is resale proof (imo, of course) - ESPECIALLY if you factor in that some consoles are supposedly sold for less than they cost to manufacture. Whats in all publishers best interest is coming up with a system that generates revenue for them on ANY resale. The executives out there are just trying to figure out a way to make this happen. For instance, imagine you want to buy a PS3. You can buy it at retail for $200. Or you can buy it at gamestop for $125 with the same 1 year warrantly. The catch is that you have to pay a $25 activation fee to Sony directly to use the system. This is the same stuff they are trying to pull with games. So, gamestop can sell you a used game and make some money. But now EA wants to change X dollars if you want to play online. Eventually, gamestop's numbers will dip the closer it costs to buy and activate a used game vs buying a brand new copy. And then G$ will have to adapt and drop prices (or lock in agreements with various publishers). The future (which probably won't favor the consumer) is a model where anytime you buy a used game or system, you will have to pay some sort of fee to the publisher. This is great for the publishers (they have been getting the short end of the stick because of companies like gamestop. Bad for gamestop, but they will eventually mitigate the losses by adjusted losses and forcing the end user to pay. Or something like that. And that future is not all that far away.
Oops I do want to say one more thing today....
I have a differing experience with mom and pop shops. I like mom and pop shops of all variety. I have a particular fondness for the small combo shops that sell novels, comics, toys and games of all sorts. Small shops tend to pay attention to their customers buying habits and are self-interested to stock what we want.. Not what New Yorkers buy, and not what their buyers get the best deal on. And they deal with a volume where they can stock a new release non-seller and not lose the farm for it. Mega chains on the other hand have buyers who are disconnected from the customer base. They are tasked with acquiring massive lots of the highest margin goods. The shareheld mega chain motivations are different from the mom and pops. And they have such market influences that they have an affect on product availability.
I don't do much business with Home Depot and Lowes for one of the same reasons I stopped doing business with Gamestop. Despite their buying power and distribution infrastructure, they so frequently don't have what I am looking for. They often sell things a bit cheaper than the mom and pop this and thats. But one week Home Depot will sell the same 3M Respirator I use and stock the appropriate filters. Then the next month they stop selling 3M filters because they cut a better deal with some other manufacturer. The new product yields them a greater profit margin. But the mask for it was of inferior quality, and the only filters they now stocked were not compatible with the mask I've used for years. They stopped carrying a product I purchased on a regular basis, simply based on profit margins, not on local buying patterns. I queried store management as to where the filters had gone, and that was the answer. My local hardware store on the other hand, noticed when I started doing business with them, and added extra filters to their normal buying schedule. They stock what I want because they are in position to learn what I want. If they don't stock a product I seek, they order it for me and its there in days. If it is something I will buy on a regular basis they add it to their normal stock.
I know this is going further off topic but you sorta defended the evilness of Gamestop and I want to explain why I resist the walmarting paradigm and why I think it is a bad thing which is homogenizing our products towards inferior quality, reduces consumer choice, and stifles innovation and limits oppurtunity. Actually I am gonna stop this here. This is waaaay off topic yet it still relates to one aspect of why I am concerned that indie Stardock has sold out to mega chain Gamespot. :~p
This is real?...
I'm really sad.
What I mean is, games are tied to accounts, like Steam. That could be done with today's console, just embed a code in the game and have the console check online to activate.
They could even sell it as a service to customers, as you wouldn't need the game disk installed.
One of the best parts of Impulse was its aftersale support. What exactly does this new "unit" that Gamestop have that's so much better than that?
Ho ho...! Following Stardock news is a bit like reading Animal Farm. Guess someone re-wrote those Commandments.
Of course, Stardock has the right to do whatever it wants. I'm a bit sad. And I need to learn how the "archive" functionality works.
Wow, lotta passion on this subject. My owner on the left has a vet appointment today and I have to dig out of a snowstorm so I apologize to anyone I don't have time to reply to.
My point wasn't about my experience with Mom & Pop shops. I love specialized local stores. My point is that it's very hard to run one in video games these days. Why? Well I used Gemini Wars as my example game last time, so I'll pick on them again.
Lets say I want Gemini Wars. Big Box Inc doesn't carry it because it's a niche title. In the past, I could go to the local store and talk to the owner, who is my go to guy. He can track it down and get it here. It might take two weeks and cost $90, but he can get anything and being a local guy instead of a chain it's worth his time to do it. That's great.
Today? If I want Gemini Wars and Big Box Inc doesn't have it, Steam probably does. If Steam doesn't have it (ala Star Ruler), Impulse probably does. If it's an older game, GoG probably has it. I don't have to get someone else to track it down and ship it here. I can hit the download button and put my very high speed fiber line to work for instant gratification. Mom & Pop simply aren't competitive against that, and neither is Big Box Inc. So if you're Big Box Inc, do you bother stocking a niche game like that which might not sell, or do you stock Call of Duty knowing that you can have a midnight launch party lineup of geeks and get moms in to buy it for their teenage boys?
As a businessman, that's not a hard choice. I want to make money. I also want to have enough sales to be able to make payroll.
Impulse is an entirely different beast because the cost to carry a game is negligable compared to doing so in a retail outfit. There's no boxes, no warehousing, no limited shelf space, no shipping. I can list Gemini Wars worldwide (if the publisher lets me) for a very low upfront cost and thus I don't need to sell 100,000 units to make it worthwhile. This is a HUGE boon for indie and niche gamers.
It's also good for Gamestop. They didn't stop carrying PC games because they hate PC gamers. They only stopped carrying them because the space in the store is more profitable if it carries something else. That's just business. The whole paradigm is turned on its head online because the "shelf space" isn't really limited and its so much cheaper to get games listed.
Yeah I agree with this totally. Why would Gamestop buy it if they don't care about PC games? They can not care about PC games for free. Impulse was Stardock's most profitable unit, it would not have come cheap. Why does a publically traded company spend significant cash on something that they don't care about?
It doesn't make sense. If they made this purchase, it's because they see an opportunity to get back into the business of PC games. PC games at retail are dying off. That's just a fact. PC games over DD are thriving. Gamestop wants to be able to compete with Steam. Gamestop has gobs of cash and thus the resources to put into something like Reactor to get it done, which has been taking Stardock a very long time.
We don't know what Gamestop is going to do at the end of the day, but there's very plausable scenarios where this works out well for PC gamers.
You do make good points. I've got strong opinions both ways. You're absolutely right that this could continue to be a good thing. This is why I'm not boycotting- though I will be wary for years. I don't think Gamestop is going to slash and burn Impulse, it's obviously part of an attempt to diversify. I just worry that they can't resist the short-term temptations over the long-term benefits, which is something Brad has excellent sense about. It is an economic law that large public corporations have a tendency to be overly risk-averse and short-sighted.
If this goes bad, I'll be putting the blame entirely on Gamestop, not Stardock. If this goes good, Gamestop will have its image restored in my eyes. I do think Impulse will have a large role to play in Gamestop's future- whether it can reinvent itself or become the next Circuit City. And yes, without Impulse- the long-term prospects for Gamestop's business model are rather bleak.
BTW don't blame Gamestop's mistreatment of employees on the profitability, economic law says they do it because they can. There are plenty of people willing to take all sorts of abuse to work in the "games industry". This is true in development, and it's also true in retail.
My only wish in all this is that Brad would bring back SDC for Stardock products, just in case- it would be a nice insurance policy. If he's doing it for his applications- it can be done for Stardock's own games also, unless there's a contractual obligation, in which case I'd understand if I know about it.
Much of the anger over this is a credit to Stardock being so good, and a regrettable exception to the way companies typically act. While I understand the reasoning that was given, this is the unhappiest I've felt over anything Stardock has done.
Very disappointing. My biggest problem with this deal is this. Giving my personal datas was a conscious decision for stardock/impulse, after reading these forum and after picturing "Who are theses guys?". I dont do this for every company or on every internet-site. I dont throw this datas around like candy. I had never used Impulse, if this was a gamestop-platform right from the beginning. I dont "know" anybody from gamestop. Just a big retailer, who just wants to make big money and gives a shit about what gamers want. (imho)
(Sry for bad english. I hope its understandable what i mean.)
Haha that was funny.
One other thing to consider here. In broad terms companies are acquired for one of two reasons:
We know Impulse is thriving and not failing. If Gamestop leadership is competent this acquisition should fall into #2. Those who care about this passionately should follow development over the coming weeks and months and look for the following:
Good leadership from Gamestop combined with a culture change from the incoming Impulse team could make this a huge win-win. On the flip side bad leadership from Gamestop could blow this whole thing up. Too early to tell.
And for those who have had bad experiences with Gamestop in the past I totally understand not wanting to patron any of their business. I would do the same. However, I've bought a number of used console games over the years for my kiddos and never had a problem personally.
I used to like "GameStop". But that was WAY back when it was still mostly independent chain store of EB, Babbages, and Software, etc., not the giant it is now. This was all back in the mid-late 90's when all those stores actually had a decnt selection for each platform. (And the employees seem to at least have a clue.)
I was working outside the US most for 8 years starting in 2001. In those intervening years, GameStop has become garbage in most cases. The selection for games sucks for the PC side (if I can even find the lone shelf they MIGHT reserve for PC releases). For console releases, I don't even think about them. I prefer to buy my games NEW so I know I get everything it supposed to come with and in mint condition. (I only consider used games if it's the only reasonable way to nab a game I want.) Hell, they don't even sell much in the way of hardware/accessories/peripherals anymore either. I get better selection from Best Buy.
It's too bad Impulse couldn't be just spun off as an independent company instead of letting a retailer like GameStop take the reigns. I was VERY wary of ESD ("Electronic Software Distribution." Better knwon as, "Digital Distribution," now) when I first encountered it back in the early 2000's. I avoid STEAM like the plague. The ONLY reason I was willing to invest in IMPULSE was because of the fact it was owned and ran by Stardock.
Now, I do realize that something like a joint venture with GS would've (probably) been more headaches than worth it for both sides (SD running and managing IMPULSE with GS supplying infrastructure and leveraging it power for licensing, maybe?) So I understand the reasoning behind the sale. No problems wit the selling of IMPULSE in and of itself. It's just the buyer I (and apparently everyone else) is worried about and wary of. Hell, if anyone, I'd rather Stardock sell to Amazon. They have MASSIVE resources (I would think far more than anything GS could afford) AND global reach. They have huge infrastruture for growth (just look at what they do with EC2). And they have huge leveraging power as well.
Now that I think about it, did SD even consider Amazon as a possible partner? If so, why weren't they choosen? I can see maybe Amazon being so large and general purpose as a retailer possibly being a turn off to deal with them. At the same time, they do have some experience with ESD/DD at the retail level (Amazon Music and now the Anazon App Store.)
Well, anyway, back on point a bit more...
My biggest worry with the GS acquisition is how GS will deal with Indie studios/Devs and all the smaller companies. Games like Recettear and all the smaller, niche type games I don't think I would've known about or bothered to buy if it weren't for IMPULSE willing to host them. I read about Recettear on a different site and was happy to learn that IMPULSE carried it. Osmos I found via IMPULSE TV. There's also Starscape, Evochron Mercenaries, and Eufloria. I have my doubts and reservations on how GS will treat the smaller side of the gaming industry.
There's only one other company I have a personal attachment to on the same scope I have with SD. It's The RIGHTSTUF International. I've dealt with their Customer Service for various reason in the past (usually because of things that come up on my side of things, not their side). Their service and support is very personable, much like SD/IMPULSE's. So they earn my respect and trust. GS has not.
Only time will tell how this will play out. (Especially with how GS will operate IMPULSE: independent subsidiary or fully integrated division?) In the meantime, I think I'll have to back up everything from my IMPULSE account (and possibly be prepared to kill my account, just in case...)
On a side note: Will the terms of the agreement ever be made public one of these days? (I'm guessing some time after the merger in complete, if at all?) All the stuff I said above is without knowing all the details that went into the agreement (which is probably way so many of us are so worried.)
It is 2nd of April, can we stop this joke now? Brad?
It's amazing how Brad just gets people to follow him. And if I'm sounding envious, I am. In the original story, here's Brad: "Impulse is starting to make too much money. I don't like that. Let's sell it." He's got his money, he just wants to focus his life on the fun stuff like designing games. And people folllow him! They follow him like a rock band leader, who goes off in whatever artistic direction he feels like, and the band just follows along. The rest of us mere mortals would have to come up with numbers, & data, to present to the team and justify our actions to rally the troops, and the numbers trump the "artistry". I never would have done that. I would have de-prioritized the games unit and made the company a distributor.
I would love to hear Brad speak on leadership. He probably doesn't even know what he does differently.
I've posted before that I don't like this deal BUT there are two sides to this.
Stardock - This is a good move for Stardock. As Brad stated Impulse was taking away a lot of resources and attention from what they do best...games and Windows productivity software. By selling Impulse they get that off their chest, get an influx of cash in the process and can hopefully be a better game developer to avoid another Elemental and also a better game publisher and avoid another Demigod. This is all good for fans of Stardock games.
Another side benefit I see that I haven't seen talked about is wider distribution of their games. Let me explain, in the past Stardock has refused to put their games on Steam because Steam requires the bundling of the Steam store which is in direct competition of Impulse and thus the Stardock bottom line. NOW that Stardock no longer owns Impulse that issue is no longer an issue. Sounds like Stardock has a certain window here of continued exclusivity to Impulse but once that agreement runs out I can see a year or so down the road Stardock putting their games on Steam which again will only help Stardock reach more gamers. Note that Brad has always stated he doesn't hate steam and likes the platform. It just directly competed with him. Now that is no longer the case. I think this may have been a pretty big reason in the decision to sell Impulse.
I really don't see many gamers or "fanbois" having a problem with this side of the business decision.
Gamestop - This is the other side of it is who bought Impulse. Gamestop is hated by PC gamers moreso then Steam. In fact much of the Steam popularity in the beginning was that gamers could get games *without* having to buy at Gamestop. I won't repost why gamers hate Gamestop, that has been done a lot already. It is curious why Stardock/Brad decided to sell to Gamestop which violates so many of the gamers bill of rights statements but that's neither here nor there, it was purely a business decision I'm sure.
I think though we may see an end to the "Stardock way" of doing games now that Impulse is no longer theirs. I mean, I can't really see how Stardock gives away Enchantress in the future where they don't own Impulse. Right now they just flag people's account to get it. But when they don't own Impulse anymore and perhaps are on Steam and GG as well....how will they do this? I guess they could email codes out to current registered owners but now they need to almost build up their own infrastructure again. Certainly could happen but it won't be as easy as when they owned the store and could do what they wanted to with it.
So now for many gamers it comes down to the "lesser of two evils" between Steam and Gamestop. Yea there are other smaller players like GG but these are the big boys. At least it will come down to this for me. Certainly I will keep an eye on Impulse and will still use it for Stardock games if I have to but I'm about to welcome my Steam overlords despite a promise to myself in the past to never use Steam. But without a good alternative (less evil) I guess I'll go with the majority on this one.
There's a huge difference between blind devotionism and real-world rational measurement of pros and cons. Recommending people to think the thing through is not akin to being a Brad lemming. I would argue that those jumping on the doom and gloom bandwagon are as just as bad as anyone who argues anything Brad does is righteous. If someone made an argument "I support Brad no matter what he does, he could kill my mama and I wouldn't care!" then I would understand your point but I haven't seen a single poster here make anything close to that argument. Everyone criticizing Brad or SD is not a troll and neither is everyone calling for rational thinking a Fanboy.
Bottom line: Brad explicitly said his heart isn't in taking Impulse to the next level. So he sold it to someone who has the means to do it. Maybe he had other offers, maybe he didn't, maybe Gamestop paid a high premium for it. Maybe Gamestop will kick ass a result of this acquisition, maybe they'll completely destroy it. Who knows at this point? Time will tell.
I'll repost what I put here yesterday (and seems to have been deleted)
Gamestop let me down three times and I no longer use them to import games from the US.
To precis:
1. Failed to deliver game - 6 month fight including sending them my visa statement (which they did not take as proof that the game had been paid for) at no time did they provide one iota of evidence that the game had been despatched. No shipping code etc, not even a date. After 6 months they refunded me "as a gesture" - I think that attitude wound me up more than anything
2.Charged early for a game that had not been released against their own policy of not doing do (and we are talking almost 2 months not a couple of days)
3. Refused to service my account. I rang and spoke directly to a rep at gamestop (at my considerable cost from the UK) was told a direct lie that they "no longer export to UK"
I've never had such bad service from a company..
Maybe for US customers they are ok, but for the rest of us they are a terrible orgainisation
(Note to Frogboy - if you call this a "Strawman argument" - please explain your reasoning this time - or better still don't use terms you don't understand)
Even better forum mods - just delete this post like you did to yesterdayst - A great way to win an argument is to deny the opposition a voice - it's also the most egregious and dictatorial method as well - and says a lot about the character of the deleter.
Seems that any real dissent is already being quashed and this free forum is a mockery of its former self already.
Scritty
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