Gamestop CEO dips toe in fiercely fought game-hardware arena

SAN FRANCISCO Tue Jul 31, 2012 6:34pm EDT

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SAN FRANCISCO (Reuters) - Gamestop Inc, a retail chain struggling to reverse slowing videogame sales growth, wants to accelerate its foray into accessories and eventually make everything from Web-browsing devices to bluetooth-enabled keyboards, its CEO said on Tuesday.

The U.S. company, which already makes and sells its own bluetooth-enabled gaming controller for Android tablets, intends to invest tens of millions of dollars a year in research and on its 200,000 square foot manufacturing-refurbishment facility in Texas and build competency in manufacturing, CEO Paul Raines told Reuters.

"It's unusual for a retailer to become a research and development and technology manufacturer," Raines said in an interview. "But what we're learning is, because of the unique position we have, we have to lead innovation in gaming because it's not happening otherwise."

Sales of traditional video game products such as consoles have been pressured globally by lower-priced online offerings and as gamers spend more time on tablet computers and phones.

GameStop has weathered the trend by focusing on selling new and used games to console owners and expanding its digital and mobile offerings, including sale of iOS and Android devices in some stores.

Raines said the games retailer probably would not manufacture tablets like the iPad or Nexus 7, but focus on devices that "facilitate game play."

Besides manufacturing and selling its bluetooth-enabled gaming controller for Android tablets, the company plans to make more accessories to enhance gaming experiences on interconnected Web-based devices.

Raines did not provide a timeframe or disclose the amount of investment for plans to manufacture game hardware but said that it would be a significant part of the company's strategy moving forward.

"No one is really bridging the mobile-to-console world the way we will."

(Reporting By Malathi Nayak; Editing by Gary Hill and David Gregorio)

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