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Retail

GAME aiming to triple digital sales by 2013

Wed 16 Feb 2011 3:52pm GMT / 10:52am EST / 7:52am PST
Retail

Boxed games to remain focus as retailer aims to offer online pre-owned on all games

GAME Group CEO Ian Shepherd has told investors that he plans to triple the company's digital sales from 100 million to 300 million by 2013, but remained clear that boxed sales would continue to be a focus.

Speaking as part of a business strategy presentation to investors, Shepherd outlined a plan to build on existing strengths whilst taking on new challenges in an evolving marketplace.

"Great businesses are good at reinventing themselves," said Shepherd. "Following their customers as their customers change. Gaming customers are changing."

"The market is getting more confusing. That creates as opportunity for the aggregator, the expert, the guide. In the games market today there is not that guide across the whole breadth of the market. By deploying our strengths we can position ourselves as that aggregator."

Key to that strategy is tracking customers and increasing loyalty, Shepherd believes. Schemes such as the GAME loyalty card are already helping to do this, but by keeping customers close, the CEO believes that he can make sure that GAME is the first point of call at each stage of buying. Part of that is recognising that, whilst digital and boxed sales may be different revenue streams, they are also coming from the same customers.

"It's misleading to think of those two lines [boxed and digital sales] as separate," he said, referring to a sales projection graph.

"Boxed product has been challenging, and will continue to be so, but it remains important, and will continue to be so.

"Most digital content sold today, is add-ons to physical boxed products that's already been sold. Map packs, DLC, extra characters."

Therefore, a loyal customer not only buys a boxed game from his favourite retailer, but reward schemes encourage him to return for any future DLC purchases. This, Shepherd hopes, is going to help the group triple digital revenues from the current 100 million a year to 300 million.

"That's the point at which we'll be starting to genuinely play in the online and digital space to the same extent we currently play as a successful business in the retail space."

High street stores continue to play an important role in strategy, giving a touchstone to the shoppers experience which Shepherd saw as important to the store's Christmas period sales figures.

"People chose to come and buy games from people they could talk to about it," the CEO claims. "From somewhere they could touch and feel them."

But stores have another function to fulfil in the new strategy, too. By ramping up trade in deals and the pre-owned market, Shepherd feels that GAME can soon increase the 2000 used games they currently offer online massively, aiming to offer a pre-owned option for every single title "within the next few months."

"Having a great retail space will catapult us into a leading position in digital and downloaded content. What it's doing is bringing the multichannel opportunity to the fore because it's using the trade in engine generated by the store estate to create a competitive position online which a standalone online retailer cannot do."

6 Comments

Wesley Williams Quality Assurance

133 72 0.5
But stores have another function to fulfil in the new strategy, too. By ramping up trade in deals and the pre-owned market, Shepherd feels that GAME can soon increase the 2000 used games they currently offer online massively, aiming to offer a pre-owned option for every single title "within the next few months."

Games developers are going to love that!

Posted:3 years ago

#1

Terence Gage Freelance writer

1,288 120 0.1
Great: so GAME increase their emphasis on pre-owned, more and more publishers restrict content with Online Pass-style schemes, and the customers are the ones who will suffer. Meanwhile prices on new releases will continue to drop within weeks, fewer people will pre-order as a result and the UK videogames market as a whole gets devalued.

I can see this not ending well. Dead Space 2 has just popped up for 24 online, less than 3 weeks after its release and while it's still #2 in the all-formats chart.


EDIT - sorry, I realise that comment all sounds a bit pessimistic!

Edited 1 times. Last edit by Terence Gage on 16th February 2011 5:54pm

Posted:3 years ago

#2
I'm not sure why Game sales would increase digitally.

At the moment, its cheapest pre order and best value for money digital front stores that has my loyalty.
In addition, Game doesnt always offer the better deal with Play, Amazon, Gameplay, Asda offering good variation

Posted:3 years ago

#3

Kingman Cheng Illustrator and Animator

954 183 0.2
Triple? Are you sure? Good luck competing with Steam!

Posted:3 years ago

#4

Private Industry

1,176 182 0.2
I can only speak for myself (a geek) but Game is the last place I go to buy games from people I could talk to about it, because I remember going to game pre ordering the GT5 signature edition and the guys had no idea about the release date 5 days after Sony confirmed the release (the final one) because I asked them if it`s going to be released on Wednesday (like in all central EU countries) or Friday (as for most releases in UK and Ireland) and they didn`t even know if it would still come out that year. The least time I overheard a conversation between a customer and a sales person at Game where the customer wasn`t sure if he should get Just Cause 2 or Crackdown 2 and the sales person recommended him Crackdown 2 because it`s a lot better. If I go there it`s because either they have a CE Gamestop and HMV don`t have or I have some money on my card that makes it cheaper to buy it there, otherwise it`s HMV because they are 5 Euro cheaper or in case of the Helghast edition 35 Euro and I don`t have the patience to wait for online deliveries of EU versions. :D

Posted:3 years ago

#5

John Bye Senior Game Designer, Future Games of London

481 453 0.9
So as if it's not bad enough that they push used product so hard in-store, now they're going to be doing it online too. GAME are effectively discouraging anyone from ever actually buying a new game once used copies of it start coming into stock after the first week or two on sale. After all, if you can buy a used copy of any game they stock for a few pounds less than a new copy, and you're prompted if you want to do this at point of sale (online or in store), how many people are really going to pay extra to get it new?

It's not just the lost revenue that's the issue here. I have no problem with people selling their games second hand on eBay if they want to. The real problem is that the more big high street retailers push second hand sales, and the more of their shop space (online and retail) they give over to used product, the less space there is for new games, and the narrower the range of new product they stock and promote.

This focuses more and more of the industry's profits into first week sales and a handful of big blockbusters, while smaller titles are lucky to have a single copy hidden away at the back of a shelf somewhere in the depths of the store, and can vanish entirely just a few weeks after release, leaving people with no choice but to buy a used copy or hunt around online for a website that still has it in stock.

Just a couple of days ago there was a story on this site about the market for games that fall between low budget digital and mega budget AAA drying up. I'd argue that this kind of behaviour by retailers is a big reason why that's happening.

Funnily enough, I was in GAME just last week looking for a last minute present. Not only did Toys 'r' Us have the same game five pounds cheaper, with a free figurine thrown in to sweeten the deal, but even GAME's own website undercut their in-store price by three pounds.

Posted:3 years ago

#6

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