Digital distribution isn't killing GameStop — it's only making it stronger

GameStop’s stores are brick and mortar. Downloadable content is 1s and 0s. Despite that seemingly irreconcilable difference, the physical GameStops are making plenty of money from selling digital goods.

When you think of GameStop, you probably think of shelves stocked with the latest discs for PlayStation 4 and Xbox One as well as preowned Xbox 360 and PlayStation 3 games, but that only represents a portion of the retailer’s business. GameStop also deals in downloadable content for games as well as currency cards (these add money to your online account) for Sony’s, Microsoft’s, and other companies’ digital-download stores, and that’s a growing part of GameStop’s business. In 2013, the company generated $724.4 million in digital sales. That includes its Kongregate mobile gaming site, PC digital downloads, and in-store digital sales. For the first quarter of its fiscal 2014, GameStop noted that its digital revenue grew 9.5 percent year-over-year thanks in large part to currency cards for PS4 and Xbox One. GameStop is the biggest game-specific retailer in the world.