Spawn’s HD-730 streamed console games to PCs.

MAY 19, 2011 • GameStop is beta testing a cloud-based distribution service fulfilled through game streaming startup Spawn Labs that was acquired by the retailer last March. The internal testing is available to GameStop employees only.

Impact: GameStop has made it clear that they are going on a dual-pronged approach where they remain a leader in physical distribution while also capitalizing on the growth of digital distribution.  Last year, GameStop acquired casual online game distributor Kongregate as part of their movement to digital distribution.  Long term, a company like GameStop faces major challenges if consumers start to slowdown on buying physical products.  However, correctly combining a strong physical retail presence with an online strategy could allow GameStop to standout.  The ability to exchange products bought online at a physical store is one of many examples of what could allow brick and mortar retailers to survive the growth of digital distribution.