GameStop is expanding from primarily selling games in retail stores found in malls around America to a digital strategy that includes a new mobile component starting today.

The announcement expected today is timed with the release of its new Android application, which will let users of Google’s operating system download hundreds of games for free to either their phone or tablet.

In an interview, GameStop President Tony Bartel said: “The console continues to be a growth business, but it’s also exploding outside of console. It’s moving to anywhere people have a device that’s capable of reaching the Internet–if that’s a smartphone, or one of the 50 tablets that we saw at CES. Our gaming strategy is anytime, anywhere on any device.”

That’s a relatively new concept for GameStop, which jumped into the digital realm only following its acquisition of Kongregate six months ago.

Kongregate operates an online gaming community that gives tools to game developers so they can add achievements, virtual goods and community aspects to their games.

The Android application will be called Kongregate Arcade, which will leverage those same experiences found online. The app will be available to users from the Android Market for free. Inside the game, users will be have access to 300 free games to start.

Traditionally, Kongregate makes money from in-game advertising and virtual goods sold. Its mobile app will be monetized through ads only.

Kongregate CEO Jim Greer said he thinks users will find it easier to discover new games on the Arcade app than on Android’s default market. “We see the discovery of games in Android marketplace as an issue. It’s hard to find titles and it’s not well curated,” he said. “We’ve learned a lot about making customized game recommendations to players based on what they’ve played and what their friends have played, and their ratings and game play styles.”

In addition, he said the Android version will be linked to its PC version, allowing users to tap into the community they’ve already built, and earn achievements on both the phone and online.

GameStop plans to promote the application in its physical stores and leverage Kongregate’s 13 million monthly unique visitors on the PC to make it a hit. Already, Greer says, Android users are the most likely to visit the company’s mobile Web site.

Interestingly, Kongregate has created the experience in Adobe’s Flash Player, meaning that even if Apple allowed it, it would not work on the iPhone because Apple doesn’t support Flash. Likewise, it will only work on Android phones that support Flash–that is, phones with version 2.2 or higher.

GameStop will be competing against other companies, such as Aurora Feint’s OpenFeint game network, which claims to have 3,400 games and 55 million users across Apple and Android. In a way, GameStop will also go head-to-head with one of its more traditional competitors, Amazon.com, which is preparing to release an Android app store that also aims to solve the discovery problem.

Here’s a partial image of the site–click on the image to make it larger.

We have also been lax in posting new episodes of the GigaOm Show on Revision3, which Malik co-hosts with Joyce Kim.

Here is the latest one with Jim Greer of Kongregate and Jameson Hsu of Mochi Media, talking about monetizing casual games.