HMV's Simon Fox - 1
The entertainment retailer's CEO on a tough climate, the Facebook threat and motion control
This is the first in a three-part expansive interview with HMV UK & Ireland CEO and MD Simon Fox - one of the most influential people in UK retail today.
As the videogames business continues to weather an economic storm, here he discusses the health of the industry, the impact that social networks and other free platforms are having on core gaming habits and his views on the new motion control peripherals from Microsoft and Sony.
The thing about HMV is that, as a business, it's been around for nearly 90 years - it started in 1921 - and therefore, inevitably, the DNA of the business started in music, and people will have that perception.
But of course, really for the last twenty years, we've been a broad entertainment brand - and games fits absolutely squarely within that. We don't think of ourselves prioritising one product group over another - games is just part of the mix of products that we sell, and while it varies from year to year, it represents about 15 per cent of our business. That makes it a core category.
Well, as you say, we're playing primarily in the packaged games business and the games market has changed hugely in the past few years. People play games in a whole range of ways, from the App Store through to Facebook - and that's not a market that we participate in or benefit from at this point.
So we are highly dependent on the health of the hardware and console market, and the packaged software market. Over the last three years we've enjoyed two years of spectacular growth really, largely on the back of the Wii - not solely, but they've been two very strong years. That was followed by what's been a much tougher year in the last 12 months or so - the games market is cyclical and the last 12 months have been tough.
Certainly there are new products coming out that give us cause for optimism - we're all very excited about the 3DS from Nintendo. Clearly we don't yet have visibility on a date for that, but the sooner the better. I think that's an unbelievably exciting device that will put product back in our hands, in our stores - we need product to sell, that's what brings people into our stores.
And we need publishers bringing out big titles - the line-up looks pretty encouraging between now and Christmas. But that's what we rely on.
I think it was disappointing - as you say, when we sat in Q4 last year it looked as if there would be a more even spread of hits throughout the year. Red Dead Redemption stood out as something very special - but it does look like, again, that all the hits are in Q4 this year.
We are a highly seasonal retailer, and it's not just in games - we see the exact same thing in music and DVD, and a week in Christmas is equal to a month at any other time of the year. So Q4 - that is the time when customers are in our stores, and I do understand why publishers would want to make sure that's the time when they have their very best product available... you go fishing when the fish are in the sea, as it were. Our products do make perfect gifts.