How GameStop is faring as a video game publisher

GameStop has more than 7,000 retail stores for selling games, but it’s also diversified into publishing games under its GameTrust label.

Instead of competing head-on with game publishers, GameStop is going after games that might otherwise not get published or noticed. It is targeting titles from seasoned independent developers whose games could sell for $15 to $40, rather than the $60 triple-A games.

Mark Stanley, the vice president of internal development and diversification at GameStop, sat down with me to explain the strategy at the DICE Summit, the elite game event in Las Vegas this week. GameStop has published its first title, Song of the Deep from developer Insomniac Games. The title sold better than expected and had surprisingly good sales of collectible merchandise.

The idea is to showcase these types of games in GameStop’s retail spaces and sell accompanying merchandise at the same time. More games are coming soon. Here’s an edited transcript of our interview.

Mark Stanley: Last time we talked, we were on the eve of launching Song of the Deep, our first game with Insomniac. Here we are a few weeks away from games two and three.

GamesBeat: How long has it been since GameTrust started?

Stanley: GameTrust was announced in early 2016. So we’re in our first year, still. We’re now on the eve of launching our second game with Ready at Dawn, Deformers, a massively different game. Also we have a third game in the works with Frozenbyte, Has Been Heroes, out of Finland. A roguelike strategy game on rails.

GamesBeat: Do these have dates yet?

Stanley: March 28 for Has-Been Heroes. That’s on all platforms, including Switch. It’s one of the first Switch strategy titles. Deformers doesn’t have a launch date yet. Soon. We’re still finalizing our date.

GamesBeat: It sounds like you’ve put in a lot of work since last year. What pace are you on as far as releases per year and how many developers you want to work with?

Stanley: It’s still kind of early to tell. We envisioned that our sweet spot would be four to five games per year. As far as partnerships, that’s TBD. Our goal is to take existing partnerships and continue working with these great independent developers. As we finish one project, we’ll talk about what’s next. We’ve enjoyed working with them, and once you find these great synergies, it’s so much better to just continue working on another project versus starting from scratch with other partners. Although we are constantly working and looking at other partners to bring on board. We have other projects signed that we’ll be announcing shortly. But our goal is to have pipeline materialize across console and VR/AR.

GamesBeat: What did you learn from the Insomniac game?

Stanley: Number one, Insomniac’s awesome to work with. It was great to partner with a development team of their caliber, working on a type of game they’ve never built before. They were taking a lot of risks. This idea was basically the brainchild of Brian Hastings, their chief creative officer. It was all led from there. They put a lot into making what could be a very simple 2D Metroidvania style of game into a beautiful piece of art, with a great story behind it. They took a lot of risks with technology, making a 2D game blend with 3D scenery.

We also experimented a lot, this being our first title, with how we approach a small title like this and treat it like a triple-A blockbuster franchise. We approached it very differently, but beyond creating a strategy plan and a PR plan and all that, we successfully expanded this IP into other channels of media. We partnered with Barnes and Noble to develop a middle-grade book telling the story behind Song of the Deep. It was important to provide gamers with a way to connect with the IP beyond the game, so the book was one way to do that, and it was also a way to bring a new audience to the game. We had a great partnership with Barnes and Noble. We cross-promoted the game with the books we brought the gaming audience to the book and vice versa. We learned a lot about book publishing in the process.

From the collectible standpoint, this IP was so rich. We decided to develop a line of collectibles, so alongside the game at launch we had 12 different collectible SKUs, from a simple deck of cards with all the characters from Song of the Deep to a Pop Rides vinyl toy, with Merryn and her submarine. We had a really cool collector’s edition, which is now selling for five times the original price on eBay, with the artbook and things like that.

We learned quite a bit about what we can do with a simple title. We can certainly treat it like a triple-A game and make investments to be sure the IP has a broad reach. We also learned that out of all the different ways you can market and promote a game to try allow it to rise above the sea of content out there, one of the biggest assets that was successful with Song of the Deep was our base of store leaders. We have 6,000 stores around the world. We may have 10 to 15 leaders per store. We integrated them into the process for Song of the Deep very early, so they felt—they had ownership in the development of the title. They had a relationship with Insomniac.

The approach with them on Song of the Deep was very different, because they’re used to selling triple-A titles from publishers. They see games along the same timeline as any gamers do. Involving them in the process of this title very early gave them a sneak peek into the inside of the world of development, but also created this passion behind the title that was amplified around launch time in a way that we never expected. If you can imagine each of these folks having their own social network of 50 or 60 people, multiplied by 10 or 15, multipled by 6,000, suddenly you have this entire social backing for the game that we underestimated. It became a huge force behind the success of Song of the Deep, both its physical form in stores and across digital distribution channels.

GamesBeat: Did you guys ever announce how well it did?

Stanley: We don’t specify units, but from a physical perspective it overachieved in our first three months of launch. It beat our wildest forecasts by 28 percent on the physical side. On the digital side it did way more than that. One piece that also surprised us was the attach on the collectibles. We knew there was a high risk on collectibles, especially for an unknown IP. You can imagine the investment that goes into manufacturing and so on. Traditional attach rates on collectibles for triple-A IPs are around seven to eight percent. Song of the Deep was tracking 12 to 14 percent, which is interesting data. We’re on to something there. We’re still learning exactly what it is, but our gut feel that we could allow people to explore a new IP and have a relationship through collectibles and limited edition runs of products—we’re certainly going to explore that with future games.

Price point was a good learning area too. This was a $15 game. Being able to go out there with a physical $15 game and a digital $15 game was interesting from a retail perspective. Not too many games go out there at $15. It’s certainly economically challenging to go out with a $15 game, but we made it work. On the digital side, it was a very welcome price point, especially because what gamers received was probably more like a $24-29 value.

GamesBeat: Insomniac had something like five launches last year. They had quite a few games come out.

Stanley: They had two VR games, Edge of Nowhere and Feral Rites. Song of the Deep was the third. And Ratchet and Clank, yeah. Obviously they announced Spider-Man with Sony. I’m not sure what else they’re working on now, but—our entire approach from Game Trust has been to be an invisible platform that allows the game to go to market successfully. As such, our promise and our offer to developer partners is, “We’d like you to focus 100 percent on the game. We’ll take the other stuff that comes with launching a game off the table. We’ll work on the launch strategy, PR strategy, business development. Let us take that off your plate and sync with you on the way.”

The experience for Insomniac was very positive in that sense, I think. It’s no coincidence we’re called Game Trust. We trust them to make a great game. We’re not getting involved in the creative process of the game. They trust us to do everything else, set up the game for great success. It’s not often that you enter into a partnership where you have a vision and a hope, and at the end of it you’re still aligned to that vision and that hope. We both feel that way.

GamesBeat: Are you applying the same strategy to your next games as well, or are you going to do anything differently?

Stanley: They’re drastically different games, so they’ll have different needs. Going from a single-player adventure game, 8-10 hour game, to a massive multiplayer arena combat game is soup to nuts. Our approach has been different. The way in which we’re pacing game announcements, reaching out to social media groups, that approach has been different.

Deformers, for example, is a game that wants enough people to get a taste of it that it snowballs on its own. It’s an incredibly easy to pick up game. It’s challenging, but it’s a heck of a lot of fun. It has features like four-player split screen, where you can have the couch multiplayer experience at home, and then you’re also able to join multiplayer global lobbies and have fun there as well. You can get better at different features of the game – throwdown, shooting, movement – but it’s very difficult to be good at all of them. It’s going to have an equal playing field globally, which I think will really catapult the game.

How we get millions of people to play that game in the first month is a different challenge compared to making sure that people get into Song of the Deep, enjoying the art and the music behind that game. It’s a completely different piece of art.

GamesBeat: Has-Been Heroes is after that, right?

Stanley: Right, and again, it’s a totally different game. It also encompasses being part of the launch window for Switch, which is a whole new experience hardware. We all hope that does fantastically. The game fits very well on the Switch. It’s a very simple game, but impossibly difficult to master. You have permadeath, beautiful things like that that just drive you crazy and make you want to throw the controller down. And then five minutes later you want to pick it back up because you can’t stand that you haven’t made it to the next level.

We have a more hardcore audience for that one, an audience that loves strategy and being able to think through a game. You can plan your attacks very carefully. There’s a comic base to the story, too. Frozenbyte has a very good sense of humor in these things. You have these three heroes that used to be the king’s toughest men, and now they’re kind of over the hill. They’ve been called up for one last mission, but it isn’t anything like defending the castle – it’s escorting the twin princesses to school. The background is pretty cool. As the player, you make sure they get there.

GamesBeat: Do you have a collectibles plan around those as well?

Stanley: They’ll each have that, in different ways. That’s an area where we’re continuing to experiment. You can spend millions of dollars on collectibles, put them out there in the marketplace, and hope they sell. But we’ll try different approaches with different games to see what resonates and what doesn’t. Thankfully we have the luxury of being able to leverage the acquisition of ThinkGeek two years ago. They’re very good at product development and manufacturing. They’re the ultimate tinkerers. They’ve invented everything from Death Star waffle makers to Star Trek sushi sets. All this stuff my wife keeps telling me to put back in the closet. [laughs] We say, “Hey, we’re working on this great game,” and these guys just start coming up with ideas.

In the case of Frozenbyte, this Finnish development team gets to work with other creatives, leveraging their IP in new ways like collectibles, whatever shape they come in. That’s a pretty cool experience. Traditionally, independent developers haven’t had the option or the resources to spend on developing that. Usually it’s an afterthought, and an expensive one. When you’re talking about tooling and lead times, it can get pretty challenging. With our structure, though, leveraging the mothership of GameStop, we’re able to do that.

GamesBeat: How do you feel about being competitive with so many other publishers out there?

Stanley: Our focus has been filling this gap. Traditional publishers – and the industry as a whole — are banking on triple-A hits, franchises. That generates 90 percent of the industry’s revenues. We all need that. GameStop banks on that. But in another sense, there’s a void. Those $5 million to $20 million development budget titles that deliver an experience more like 10 or 20 hours, for price points around $20-40, we believe there’s a market for that. Not many publishers are pursuing that category. Not many developers find partners that will take the risk to bring these ideas to life, ideas that may have been in their minds for 10 or 20 years, but stayed on the shelf because they never had support.

We’re willing to take that risk. We might be technically a publisher, but we’re really something more like a “devtailer” here. We’re a developer-retailer partnership. We’re the only partner that can guarantee a developer retail placement. We can use the house rate on that. I can knock on the door at my merchandising team and visual team and be able to display a title as if it were triple-A. We have added advantages that come along with being part of the GameStop ecosystem that we leverage carefully. Lots of ingredients there. We’re at the point now that we’ve learned to make a couple of dishes, but we’re trying to diversify our menu. How do we use those ingredients to satisfy different gamers’ tastes, both domestically and globally?

It’s a journey. By no means are we becoming Michelin-star chefs yet. [laughs] But we’re on our way to getting there through experience.