How Gamestop avoided becoming the next Blockbuster

Gamestop's sales are growing.

The company reported a 8.6% increase in same store sales over the previous year.

Thanks to Gamestop's smart strategy, growth is likely to continue, according to Stephen Ward, commercial director of retail analysis firm Conlumino.

Gamestop is determined to avoid being the next Blockbuster.

Many people assume that the videogame seller will go the route of book, music, and video stores, reports Joshua Brustein at Bloomberg Businessweek.

But despite criticism, Gamestop has a "surprisingly happy" prognosis, according to Brustein.

Here's how Gamestop is bucking all the gloomy predictions.

Selling downloadable game content.

Gamestop has been able to get customers in stores to purchase digital content.

The company lets customers come in to download video games and other licensed products, such as other game levels.

"The chain is able to sell downloads in physical stores in part because many of its younger customers don't have credit cards, which makes it hard to pay online, and because people want to use the trade-in value of games they're done playing," Brustein writes.

Becoming a social destination.

Gamestop's average customer is a "young, aimless" man, according to Businessweek.

The retail locations have become a place where young men can socialize.

"We have people who shop at Amazon but come in here for the interaction," a store manager tells Businessweek. "We say, "Look man, I get paid either way - I'm here to help you.' That goes a long way."

Being the leader in the industry.

Gamestop's competitors include Wal-Mart, Target, Best Buy, and Amazon. There are no other major retailers who focus only on videogames.

This expertise helps Gamestop attract and retain more customers than the competition.

The company also has trade-in and loyalty programs that are unrivaled by competitors, according to Businessweek.