While Zynga posts a small profit, they are still struggling in the sea of mobile and social game developers, and that sea keeps getting larger. GameStop has been talking about moving into the digital realm for a while now, and started doing that exact thing when they bought Kongregate in 2011. Now, the used-game giant is putting up $10 million for mobile game developers.
How will it work? GameStop will be fronting the money, their consulting services and marketing support to any developer who chooses to come up with a free-to-play mobile game for their Kongregate service. Then, through GameStop's channels, it will promote said game, which is huge, considering half a billion people visit GameStop brick-and-mortar stores each year. This is also a very intriguing move, as the company is pretty much buying the efforts of smaller developer studios, as long as they think the game will be successful. For mobile games, the hardest part is gaining exposure and traction, so with a push from GameStop it's possible that the games will be put on an accelerated path to popularity.
In keeping with the "battling Zynga" mentality, GameStop has also brought on former Zynga exec, Pany Haritatos, to lead Kongregate's mobile games division. With eight years of mobile gaming experience, Haritatos seems like a perfect fit. On this news and the already-existent success of Kongregate, Haritatos said,
Developers are increasingly finding it harder to get their games discovered through the different app stores. I personally faced these challenges in 2009 while managing my own game studio. Utilizing the Kongregate platform made my games successful, which ultimately led to my studio being acquired by Zynga... The fact is that there are hundreds of developers trying to get into mobile but they cannot compete with those that are in mobile now. They need to get their games in the hands of core gamers, but there is no easy way for them to do that.
With 15 million unique visitors a month who play games on the platform for over 28 million hours, it's possible that this move could be what launches GameStop into the same competitive realm as its opponents. It'll be interesting to see how they go about it, but investing $10 million is serious business, so it looks like they're going all-out in hopes to pick up a bunch of great games.