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Microsoft agrees to share digital Xbox revenue with GameStop

Microsoft agrees to share digital Xbox revenue with GameStop

Tech giant Microsoft has agreed to share digital revenue on Xbox consoles sold via US retailer GameStop.

The news was, in fact, buried in a press release that the High Street chain put out earlier in October when it announced a "multi-year strategic partnership" with the Big M. Investment firm Domo Capital Management has looked into the deal, saying on Twitter that Microsoft would be giving a slice of digital revenue – downloads, extra content and so on – from any Xbox console sold via GameStop.

Domo also says that Xbox will give money from DLC for games that were bought with other retailers, too.

"The way it's going to work is for every Microsoft Xbox console that GameStop sells going forward, GameStop will get some percentage of the revenue from every digital full game download, DLC, microtransaction, and any subscriptions as well," Loop Capital analyst Anthony Chukumba told Ars Technica.

There's no word yet on how much of a slice Microsoft will be giving to GameStop, but this will likely be a subject raised in the retailer's next investor call.

The role of physical retail in an increasingly digital games landscape has been in question for much of this console generation. While more and more consumers are buying goods digitally, platform holders like Microsoft, Sony and Nintendo – at the moment – rely on brick and mortar stores to actually sell hardware. This is also why digital products are often more expensive than their physical counterparts.

Physical retailers like GameStop have been struggling in recent years, in part due to the move to digital, but also increased competition from the likes of Amazon. The COVID-19 coronavirus pandemic has had an overall positive impact on the video games industry, but brick and mortar stores have not reaped as much of the benefits due to the fact they were ordered to remain closed for part of 2020. 

In September, GameStop announced that its net sales were down by 27 per cent and that it would be closing 100 stores this year.


PCGamesInsider Contributing Editor

Alex Calvin is a freelance journalist who writes about the business of games. He started out at UK trade paper MCV in 2013 and left as deputy editor over three years later. In June 2017, he joined Steel Media as the editor for new site PCGamesInsider.biz. In October 2019 he left this full-time position at the company but still contributes to the site on a daily basis. He has also written for GamesIndustry.biz, VGC, Games London, The Observer/Guardian and Esquire UK.

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