Nordic Game: Private label brands "may come to the games market"

Keith Lincoln, author of recent book 'Retailisation', issued a stark warning to the games industry at Sweden's Nordic Game conference today - pointing out that retail label brands such as those owned by Walmart and Tesco now far out-strip those traditionally perceived as leaders, such as Coca-Cola and Nike, and that the issue may soon become prevalent in the games sector.

"The days of the private label have come to the electronics market and may even come to the games market," said Lincoln.

"Why is this happening? There is a belief that retailer brands are stonger than the actual brands, and that's beginning to take over."

Lincoln described the subject as "a problem that affects every brand in the world, and particularly brands in your market... A compelling problem which is going to get worse in the future: that of how to deal with the power of retailers."

He pointed out that Walmart's business now stands at USD 352 billion with the average multinational brand in the world averaging a "small in comparison" USD 3-5 billion.

Over 100 million people in the US walk into a Walmart every day and Walmart's own label brand is now the largest in the world at over USD 120 billion.

"Brands have to understand what retailers do right, because the reality is that over the past 20 years, retailers have had better academic models and better retailer success models than brands have," he said. "That's why they've got so big and so powerful."

Lincoln said that solutions for the games sector such as "co-opetition" (learning to co-operate with retailers instead of fighting them) and online distribution models are the way forward to staying ahead of the complete domination of retail outlets, whether physical or electronic.

"'Co-opetition' is the future... You're very small, and that's the way it's likely to stay. Retailers are gong to outgrow the brand in every sector, including yours, and you can't really compete. But you can 'co-opetite'. You can find ways of co-operating with retailers that make a lot of sense. Traditional this hasn't happened, but increasingly it's going to have to happen."