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Game Plan

Specialist retail risks becoming irrelevant - but it doesn't have to be that way

Like most of the country, it seems, I wanted to buy a copy of Modern Warfare 3 this week. I had a quick look at prices on Amazon, and checked my local supermarkets - Tesco and Sainsbury. Tesco had the best price, but was out of stock each time I went in for groceries. Sainsbury is offering similarly good value when bought with £30 of groceries, so I'll probably pick up my copy there this weekend.

It struck me, reading this week's dismal financial report from GAME Group, that at no point in this process did I even entertain the idea of buying the game from a specialist retailer. Online, I turned to Amazon; offline, I looked to supermarkets. At a pinch, I might have ended up in HMV. I'm struggling to recall the last time I walked across the threshold of a specialist games retailer in the UK - it was probably when I bought my Xbox 360 Elite a couple of years ago.

It's just an anecdote, of course, but it can't be a good sign. I'm a young professional with a reasonable disposable income and a videogames habit which would make most of the characters in Trainspotting wonder if an intervention was called for. If people in that bracket are walking away from specialist retail, something has gone badly wrong.

It seems a little cheeky for GAME to complain about the decline of the long tail in the same report that champions the 40% margins it enjoys in second hand product

Of course, GAME is quite right to point to general market trends as a contributing factor. There are broad factors, like the state of the economy, which this year finally started to make a genuine impact on the wallets of the nation. Food, fuel, energy and rent are all more expensive than they used to be, by a noticeable margin. Games aren't top priority, and cheaper alternatives to buying new products are more appealing even to those with reasonable incomes - I'm now a LoveFilm subscriber, for example, which has certainly reduced the number of game boxes stacked up in my living room.

Then there are more narrow factors within the games business which also impact on retailers like GAME. We've discussed those things at length on many occasions - the move to digital, the rise of social and mobile gaming, the resurgence of indie products and the increased focus on the games sector from retail giants like Tesco. None of these things are positive indicators for specialist retail.

In addition, there's an interesting indicator to be found in GAME's own statement this week. The chain notes that opening weekend sales aren't really the problem - as Modern Warfare 3 proves, immense opening weekends are still perfectly possible for headline games. Rather, the issue lies with the long tail, which is getting shorter and thinner by the day. The shelf life of games has been eroded, it seems, which means that specialist retail limps along between blockbuster launches, rather than being sustained by a robust underlying business.

That's a demon of its own creation, to a large extent. Nearly a third of GAME's sales come from the second hand market, which the firm has been extremely aggressive in promoting. Second hand sales don't cannibalise first weekend sales, for obvious reasons, but they do hammer down long-tail sales of new product. It seems a little cheeky for GAME to complain about the decline of the long tail in the same report that champions the 40% margins it enjoys in second hand product.

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Rob Fahey avatar

Rob Fahey

Contributing Editor

Rob Fahey is a former editor of GamesIndustry.biz who spent several years living in Japan and probably still has a mint condition Dreamcast Samba de Amigo set.

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