GameStop signs deal with Blizzard, looks to digital sales for its future

GameStop is counting on digital game sales to bolster its retail sales and has signed a deal with Blizzard. Diablo III will be the first.

While GameStop executives don't think the next generation of consoles will be disc-free, they're still betting on a massive spike in digital sales over the next few years to propel their company forward.

That surge in sales will be fueled in part by a new deal with Blizzard to sell digital codes for games and in-game items in GameStop stores, company executives said. Diablo III will be the first game sold through download codes in the stores as part of the deal.

Speaking during an earnings call this afternoon, executives from the international video game retailer also said that they don't expect a new PlayStation or Xbox to hit until 2014 and that when the consoles are released, that they'll still support disc-based games.

But the company does expect to continue to see digital game sales growing. Last year saw a more than 57 percent increase in digital sales and the company estimates that global digital sales will hit $39 billion by 2014, the year some expect new consoles from Microsoft or Sony to hit. GameStop's goal is to pull in $1.5 billion of those digital sales by 2014.

J. Paul Raines, chief executive officer of the company, pointed to Call of Duty Elite's digital subscriptions as evidence of the growing importance of digital content.

"Console digital grew at over 64 percent as GameStop created a unique technology to bring consumers' launch day downloads and opportunities for added content," he said. "A testament to our strength in this area is that two-thirds of the one million Call of Duty Elite digital subscriptions sold in the first week were sold by GameStop."

And it won't just be downloadable add-ons like expansion packs and DLC that GameStop is counting on to grow their business, they believe computer game downloads will help a lot too.

The company's PC app store doubled its revenue in 2011 and currently offers more than 1,500 games for purchase and download. The company also just signed a deal with Blizzard Entertainment to sell their games and "in-game virtual goods and services" in their stores, said Tony Bartel, president of GameStop said.

Customers will purchase a code for the download in a store and receive a pin number on their receipt which can be used to unlock and download the game on their computer at home.

Diablo III will be the first game to use the new technology, Bartel said.

Contacted after the call, a GameStop spokesperson declined to go into more detail about what sorts of "in-game virtual goods" they may start selling for Blizzard games, telling Vox Games to stay tuned for future announcements.

Bartel did say during the earnings call that stores will soon feature special sections for DLC, digital PC and cards as well as a dedicated display areas for Blizzard digital products.

Make sure to check out The Verge's interview with Raines from earlier this month too.

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