Microsoft and GameStop will Share Some Xbox Revenue

Posted on October 14, 2020 by Brad Sams in Games, Xbox with 4 Comments

Last week, it was announced that Microsoft and GameStop had a new partnership that will see the backend (and some front end) services move to the Microsoft 365 environment. But this business agreement has much bigger implications for GameStop and Xbox as well.

When the deal was first announced, on my weekly podcast – The Sams Report, I speculated that this would mean there is a profit-sharing agreement between these companies for selling Xbox consoles. I even went as far as emailing PR but they never responded.

Out today, $GME, or GameStop, confirmed that there is a revenue-sharing on downstream downloads and digital content for any device that is brought into the Xbox ecosystem from GameStop.

This is a huge win for both Microsoft and GameStop. Now, GameStop has a tangible way to improve its cashflow post console sales and Microsoft gains 5000 stores that are likely going to be pushing Xbox consoles much harder than PlayStation devices thanks to the extended revenue agreements.

The next question is if Microsoft is, or already has, signed these agreements with other retailers? For now, we don’t know those answers yet but I would think that if Best Buy saw what GameStop was receiving, they too would like in on the action.

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Comments (4)

4 responses to “Microsoft and GameStop will Share Some Xbox Revenue”

  1. thalter

    Not sure what is in this for Microsoft, other than a modest Microsoft 365 implementation. I can't see how someone intending to buy a PS5 will be convinced to get an Xbox One by GameStop. Seems like they are sharing revenue with GameStop for sales they likely would have gotten anyways.

  2. ben55124

    All Xbox retailers will want a similar arrangement. And then from Sony and Nintendo. Clever way of keeping retailers in gaming for whatever that's worth.

  3. thretosix

    This sounds cool and all for Microsoft and GameStop. Nothing is worse than a sales person trying to sell a particular console not based on it's functions and features but someone's job being on the line if they don't sell enough of a particular product or commission. Though I'm pretty sure GameStop doesn't work on commission, perhaps managers do. Retailers do need help from the manufacturers at the moment. Though I have a hard time understanding how GameStop's, buy a game for $60 sell it back to them for $15 for someone else to buy it for $55 system benefits the consumer. I've stopped going to GameStop because of just this one reason. I used to also go to GameStop for digital redemption cards and was shunned by employees because I buy games digitally even though I went to their store instead of just buying the game through the console's marketplace. I'm just done and over with GameStop personally.

  4. glenn8878

    Revenue sharing could means less incentive to discount, but then again, they still win on both sides, retail and corporate.