GameStop Dives Into Digital Distribution With Two Major Pickups

Are brick-and-mortar gaming stores going the way of Blockbuster? Probably not in the immediate future, but it has to be a concern for executives at GameStop. A few major trends are shifting; one, gamers are flocking to services like GameFly to rent games by mail rather than paying $60 a pop to own them. Another, is the start downloads. Sony's PSPgo was just the start -- there's Apple's App Store, the Xperia Play and the downloadable game market, and download titles on all of the major consoles. Gaming is shifting away from physical media, like it or not. And that leaves game companies like GameStop in a weird situation. How do that replace that lost revenue?


For GameStop, it's pretty clear that the answer is diversification and investments. The company has this week announced that they will be acquiring Spawn Labs and Impulse, a subsidiary of Stardock Systems. Wondering what these two companies have in common? Experience in digital delivery of games. As we mentioned above, the game industry is moving away from hard copy titles, and GameStop is making proactive motions to protect their future profits. By picking up a couple of companies that specialized in the distribution of games online, they'll be hedging their bets in that department.

Once the Spawn Labs integration and testing on a new consumer interface is complete, users will have immediate access to a wide selection of high-definition video games on demand on any Internet-enabled device. It still remains to be seen what those devices are, but it's clear that GameStop is now willing to become a software vendor and now just a retail shop. Man, wonder what's next?

GameStop Announces Acquisition of Spawn Labs and Agreement to Acquire Impulse, Inc.

Streaming technology company and digital distribution platform further advances GameStop's digital strategy

GameStop Corp. (NYSE: GME), the world's largest multichannel video game retailer, today announced the acquisition of Spawn Labs, a streaming technology company. In addition, GameStop announced it has entered into an agreement to purchase Impulse, Inc., a subsidiary of Stardock Systems, Inc., and a leader in digital distribution. The Impulse acquisition is subject to customary closing conditions and is expected to close in May 2011.

Spawn Labs, part of the GameStop network, brings patented technology and a talented team of technologists with unique game streaming and virtualization expertise. The Spawn Labs team will work closely with GameStop's existing R&D group to develop GameStop's growing suite of digital game products and services.

Once the Spawn Labs integration and testing on a new consumer interface is complete, users will have immediate access to a wide selection of high-definition video games on demand on any Internet-enabled device.

"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," said GameStop President Tony Bartel. "Spawn Labs and Impulse provide a customer-friendly and publisher-friendly way for us to accomplish this."

Impulse, Inc. provides a proven digital distribution platform that allows users to quickly and easily find their favorite games and download them to their Internet-connected devices.

J. Paul Raines, chief executive officer of GameStop, said, "With these important acquisitions, we will continue to make appropriate investments related to our multichannel strategy. GameStop is uniquely positioned to be the leader in both the physical and digital gaming space."

For users, developers and publishers, Impulse will offer three specific components:

* Impulse::Client - allows gamers to have instant access to a library of more than 1,100 games on day one as well as the ability to manage their game-related downloads and purchases.
* Impulse::Reactor - provides content publishers customer friendly DRM and copy protection tools. It also allows developers to enable achievements, account management, friend lists, chat, multiplayer lobbies, and cloud storage within their games.
* Impulse::Publisher - allows publishers to manage all aspects of their game with powerful real-time reporting and management tools.

Impulse, Inc. will remain an actively running business with full integration on GameStop.com anticipated within the next few months. To learn more about Impulse, Inc. and Spawn Labs, visit www.impulsedriven.com and www.Spawnlabs.com.

Media Conference Call Information

Tony Bartel, president, and Shawn Freeman, senior vice president and general manager of digital for GameStop, will host a media conference call at 10 a.m. Central Time (11 a.m. Eastern Time) on Monday, April 4, 2011 to discuss the acquisitions. To access the conference call in number and accompanying passcode, media outlets and working journalists should email PublicRelations@GameStop.com. The conference call will be simulcast on the Internet at http://investor.gamestop.com/ and will be archived on the website until April 29, 2011.

About GameStop Corp.

GameStop Corp. (NYSE:GME), a Fortune 500 and S&P 500 company headquartered in Grapevine, Texas, is the world's largest multichannel video game retailer. GameStop's retail network and family of brands include more than 6,670 company-operated stores in 17 countries worldwide, www.Kongregate.com, a leading browser-based game site with more than 13 million monthly unique visitors, and Game Informer(R) magazine, the leading multi-platform video game publication. The company also sells video games and related merchandise at www.GameStop.com. General information on GameStop Corp. can be obtained at the company's corporate website.