Can you give us a little background, and tell us what you do at GameStop?
Tom DeNapoli: My job and what I do -- actually, that's a good question. Actually, my job, as the vice president of marketing, is the chief brand steward for the company. I develop the marketing communications programs, in terms of consumer insight, media, brand look and feel; that's really my job.
Now, as we do that, we now have to say, "how do you put that under one umbrella," which we've done. The fact that we're opening new stores is going to increase that footprint. And now we've got almost five thousand stores in sixteen countries. We're the number two fastest growing retailer in the United States. So, that addresses some of those questions.
Speaking of retailing in games, with digital distribution is becoming more prevalent through Xbox Live Arcade, Wii Virtual Console -- how do you keep the gamers interested in coming in to the stores? Especially now that Sony has tested the waters with a fully downloadable Warhawk?
TD: We have done a lot of consumer insight, such as focus groups, and we've done ethnographies where we've actually gone into the homes of gamers. We've talked to them about their preferences; we've brought in friends and they've talked to us; we've done shop-alongs. The retail environment, the need for brick-and-mortar, isn't going away any time soon. As a matter of fact, we've done some proprietary studies, and worked with a consulting group, and from what we can tell, the world in terms of digital downloading -- and the distruption that it's going to bring -- is years out. As games get more complex, as we see more and more with the graphics, consider the size of the pipe that it takes.
When you look at this sense of community -- at the "millennials" if you will -- this generation that's into this connectivity, and the social aspects of gaming, what we provide is a social aspect in itself: A place to hang. When you look at our stores, they're staffed with experts that are gamers themselves. They know what's coming out. They know what the right game is. They can interact with the community, they can hang, and I think that that footprint leads to the intimacy that you have in a store; to get your questions answered that you really can't get online.
Do you do anything, in terms of the stores, to cultivate that? Or do you feel that it is just a natural outgrowth of the way that gamers relate to one-another?
TD: I think that a fortunate part of it is that we have a very passionate group of sales associates. They're all gamers themselves, they're players. And what we're finding, too, with this Wii phenomenon: Nintendo has done a wonderful job of expanding the marketplace. Not only with the software they're developing, but obviously with the DS platform and the Wii platform. But I'll tell you -- there are a lot of core and avid gamers that are buying the Wii and the DS platforms as a secondary console, or as a portable gaming platform on their own.
So when you look at that, the fact that we have people in our stores; we have the best selection out there; we have the best used trade value proposition. We have a form of currency that nobody else offers. And, our store associates are agnostic. Certainly they have their preferences, and maybe games that they like to play, but they certainly understand that this consumer group is changing, and their consultative sales skills are more along the lines of helping those folks get it right, and get whatever they're into.
When you look at, say, Gap Corporation, they have Old Navy, they have The Gap, they have Banana Republic. With the games market changing, and its audience maybe splintering into different audiences, have you thought about any sort of evolution along those lines?
TD: That's a good question, and certainly, we answered a couple of those. That's more of a segmentation question. Segmenting the customer base, and how that might turn into segmented retail offerings. Is that what you're talking about?
TD: I can tell you that it's not something that we are sitting around talking about. But I will say this: We are more and more looking at the consumer insight; we're really doing more and more research, and listening to the customer, looking at these trends -- the social aspect of gaming, and what those adjacencies and extensions are.
We'll be responsive to the consumer needs once it needs, to the point that we have GameStop.com, if your preference is in a virtual environment and now you want to buy in the store and have it shipped to you, or to a GameStop store to pick up. These are all things that we've looked at, and are looking at. At the end of the day, we want the customer to transact with us where they're comfortable. It's certainly in our brick-and-mortar, it's certainly online, and as those needs and wants and desires change, we will be responsive to that.
Finally, what do you think that Game Informer does for GameStop?
TD: When I look at that, it's certainly something that we're very proud of. Look at our heritage, as GameStop: we're all about that. It's in our DNA. Gaming, playing video games is what we do. We share that with Game Informer -- certainly a sister company of ours. The fact that they're the number one video game magazine in the business, and the fact that their expertise, and the things that they do, and the respect that they garner within the community is what we aspire to as well in terms of our store associates.
Again, we see it as just one more way that GameStop -- and again, Game Informer is a separate company, they have that editorial bias that looks at things objectively, in their own manner. And that's a great relationship.