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GameStop shutters cloud gaming department Spawn Labs

Retailer abandons cloud gaming initiative to focus on 'existing services'

GameStop has seemingly abandoned plans to launch its own cloud gaming service.

The company has confirmed the closure of Spawn Labs, the cloud gaming firm it acquired in 2011 to work alongside its R&D teams on what was expected to be a cloud gaming service to rival those such as OnLive.

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The acquisition of the streaming technology company was said to "further advance GameStop's digital strategy", said the firm in a press release at the time. But According to GameStop vice president of investor relations Matt Hodges speaking this week, the firm has now reached the conclusion that consumers are not yet "ready" to adopt the type of cloud service it had built.

Hodges told GameSpot on Thursday, "While cloud-based delivery of video games is innovative and potentially revolutionary, the gaming consumer has not yet demonstrated that it is ready to adopt this type of service to the level that a sustainable business can be created around it."

In closing Spawn Labs, Hodges says the retailer can turn its full efforts on supporting other services such as Sony's own cloud gaming service, PlayStation Now.

"We recognize that our strength is in helping our vendor partners connect with gamers," said Hodges. "So we will focus our energy on selling existing services, such as PlayStation Now, through our retail channels," he added.

Revealed at CES in January, PS Now is Sony's new Gaikai-powered cloud gaming service that will initially stream PS3 games (other platforms to follow) to PlayStation devices, Sony Bravia TVs and, in future, other Sony and non-Sony devices. Customers will be able to rent individual games or pay for full library access via a yet to be confirmed subscription fee.

Officially, Sony has said the game streaming service will launch during summer 2014 in North America. Unofficially, it has been reported that PS Now won't arrive in Europe until the first quarter of 2015.

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