Retail Therapy

Last week, HMV's flagship Oxford Street store played host to Nintendo and scores of eager gamers as the official retail partner for the launch of the Wii.

As the crowds gathered outside, GamesIndustry.biz sat down with games boss Tim Ellis to find out his thoughts on the launch of the new console and HMV's overall videogames strategy.

Read on to find out what it will take for games to become as important to the retailer as movies and music, how HMV will cope with stock shortages and which console Ellis believes will be the winner this Christmas.

Tim Ellis: I think it's hugely important. Nintendo is one of our strategic suppliers and we've got to work closely with them anyway, and HMV, being more well known certainly in the past for music and DVDs - being associated with a key games launch is huge for us. It's a real positive.

Are games becoming more important to HMV, which as you say has traditionally been more focused on movies and music?

Yes. I was on the store operations side, and going back two or three years, I think we realised games would only grow in importance with the cycle and the new hardware coming out. Certainly that's why I was brought into the role, with a brief of how can we make games more important to HMV.

It's been a great 18 months for us - we're delighted with our performance - and we can only go from strength to strength. There's another launch next year, and the excitement for Wii is just crazy.

How likely is it that games will eventually take up as much space in HMV stores as other media?

The way we always work it is the product's got to pay for its space. So if sales grow to that level, then I don't see why not. As head of games, I'd be delighted if they did.

So yes, it's always incremental with us; we're always assessing the way the markets are and the way they can develop in the future. The more we can get out of games, the more space they're going to get.

There's been a lot of talk about a shift towards digital distribution lately, particularly with regard to Microsoft's Xbox Live service and now Nintendo's Virtual Console. How concerned are you about the effect on high street stores?

We've been hearing all this about downloading with music for years and years. There's a lot of doom-mongering about downloading, but downloading audio has been big for quite a long time, and we're selling more music units than ever.

You've got to be rational about it and think, 'Where will we be in five years' time?'. Yes, downloading will be an element of it, but can Microsoft do without retail partners? Can Nintendo?

I don't think they really can, because they wouldn't get the standout - you need standout on the high street to get that perception out. If you're just relying on people sitting in bedrooms to buy your product, you're not going to get that excitement factor.

So I think there will always be a retail element. Where we'll be in 20 years, who knows, but I think there will be a retail element to all the formats we currently sell.

When planning your future strategy, do you consider that there could be a dip in the retail market as downloading games gets more popular?

We're only seeing growth at the moment. I think you can only look at a five year plan and say, 'No, there's only going to be growth for the next five years.' In ten or fifteen years' time, will we come under pressure? Perhaps we might, but I don't think it's in the interest of publishers or platform holders to do away with retail, because they won't get the standout any more.

Look at things like World of Warcraft - there are whole communities out there that are playing games in a different way, and they come back and buy all the time. You've got to tap into that.

I'm not being blase about it and saying nothing will happen; quite obviously things could happen, so it's just up to us to make sure that we're helping to develop it and to lead it. That's certainly what we're planning to do.

This time last year, you were gearing up for the Xbox 360 launch. How does the Wii launch compare?

It's equally as fraught and equally as tense, and it's all very last minute. From our point of view, it's difficult all the elements together and get your shops ready and things like that, and it's equally difficult for Nintendo as it was for Microsoft and it will be for Sony.

There are always a few little niggles, but in the scheme of things, they're bringing a great product to market, so you've got to take a little bit of the rough with an awful lot of smooth.

You know what the frustrations are going to be. We knew six months ago we weren't going to get enough stock, so you work with that. As long as we can give the public what they want over the next six months, then everyone walks away happy.

How does the amount of Wii units you have compare with the number of Xbox 360 consoles you had at launch?

That would be telling! We've never got enough. We could have sold many times than we've got, to be honest. The phones have been red hot to the customer service department - they took 1200 calls about Wii by 4pm. And that's just the customer service calls, we can't monitor how many calls we're getting in stores.

Probably three-quarters of those 1200 calls were about Wii, saying, 'I haven't ordered one, where can I get one?'. So we could have taken another 1000 pre-orders today. It's just bedlam really.

Talking to the gamers queuing outside, when you ask them which titles they're hoping to pick up, they all say Zelda. But some of them are saying that there aren't actually a lot of other titles out there which they're that interested in... Is that a concern for you?

I don't think we're that concerned. Zelda's for the hardcore gamers really, there's a lot of love for that product in general, so I think those types of punters would have wanted more pure gaming.

Personally I'd have liked a few more releases because I think we could handle them, but in the long run, I don't think it matters on day one. It's the next six months really, when developers have gotten used to the machine. With this one, it's about creative ideas and what people do with it - can they replicate DS Lite and that crossover phenomenon on Wii?

How are you expecting the 360 and Wii to perform this Christmas?

Well, Microsoft have got the stock, and unless Nintendo surprise us they probably won't have the stock to compete. It's apples and oranges, really - second year versus first day.

Next Christmas will be very interesting. Personally I'd like to think that all three of them are going to do well and there's going to be room for all three; it's great for retailers if there are three really strong consoles. Will it happen? I really don't know. As long as there's enough to go around, that's all I'm worried about.

How much of a blow was it to learn that PlayStation 3 won't be out in Europe until March?

It was more of a disappointment than a blow, really. It was a disappointment because I was really looking forward to it, and I know the team and staff were out in the stores.

But was it a blow? Not really, because until we were told numbers we weren't forecasting for the numbers, so it hasn't affected any business planning. It cleared the way for Wii, and then we just had to focus on one. Delivering two launches would have been... Interesting.

So it was a personal disappointment, yes. But hey - it'll be a good Easter, won't it?