As many will know, earlier this year the UK video game retailer GAME filed for administration, which to the uninitiated basically means it ran out of money. This is after a year that should have been great for such a retailer, given that we saw the release of Modern Warfare 3, Skyrim, LA Noire, Deus Ex: Human Revolution, Uncharted 3, Saints Row: The Third, and all the usual franchises such as FIFA, The Sims, Tiger Woods, Madden, and PES getting updates. Despite all that we found a 13% drop in revenue in the UK. This would be bad news for most sectors, but the UK only really has one specialist video game retailer, namely GAME, so you’d think a 13% drop would be something they could absorb – yet this was not the case.
Compare this with Waterstones, a UK book retailer. Yes, books, those old wooden things that must be out of date by now. Waterstones, like GAME, also has a privileged position of having no direct competitors of a similar size or reach, being the only national chain that specialises in that area. Both companies are under threat from the likes of Amazon, but book sellers arguably more so due to Amazon’s historical focus on book delivery and vested interest in promoting digital readers like their Kindle. Yet Waterstones is turning over a modest profit, despite also suffering a drop in revenues and sales. How can the new entertainment industry learn some lessons from the old?
Book shops stock a wide variety of titles, new and old. Barnes and Noble say they stock up to 200.000 titles in a store. I don’t have any hard figures but I’d be surprised if the branches of GAME I’ve visited recently have more than 2,000. Video game stores have always kept a smaller selection, focusing on the hits, perhaps worried about filling shelves with stock they can’t shift. But this means there is less incentive to go into the stores as you’re rarely going to find even a classic from 3 or 4 years ago, never mind true retro classics from a decade or more ago. Nor can you find slightly off-beat titles that might appeal to small but dedicated market niches. Shunting games off the shelves so quickly not only makes it more likely that people won’t find what they’re looking for, but also decimates the shop’s chances of cross-selling and down-selling.
Instead there is a conservative focus on the best-sellers, presumably because they are guaranteed to sell quickly, but this takes GAME into direct competition with giant general purpose retailers like Tesco who can afford much more aggressive discounting. This seems like a foolish strategy.
GAME have also annoyed publishers by supporting the used game market. While it’s reasonable for gamers to want to be able to trade in their games, and therefore reasonable for a retailer to want to make use of this, that market could easily have been undercut to a large degree by continuing to ship a wide variety of older games at budget prices, where the publisher does still see a return, and gamers get a wider choice – everybody would be happier.
Book stores go to painstaking efforts to file books by genre. This way, you can find what you want even if you don’t know its name or author, or if perhaps you don’t know exactly what you’re interested in.
Games stores do not do this. They file by platform, which is necessary but not sufficient. Then if you’re lucky, they order games alphabetically, which means you have to know the game you want. That makes it harder for casual browsers to find something of interest. (And besides, people who know exactly which game they want are more likely to just do a web search and get it cheaper online.)
We’re not lacking a way to classify game genres. Steam has one (Action, Adventure, Strategy, RPG, Indie, MMO, Casual, Simulation, Racing, Sports), Wikipedia has one (Action, Action-Adventure, Adventure, Roleplaying, Simulation, Strategy, Other), as does Metacritic (Action, Adventure, Fighting Games, First-Person Shooters, Flight/Flying, Party, Platformer, Puzzle, Racing, Real-Time Strategy, Role-Playing, Simulation, Sports, Strategy, Third-Person Shooter, Turn-Based Strategy, Wargames, Wrestling). Of course there’s no consensus here, and we geeks in the video games world love to argue about how to classify things. But it doesn’t and shouldn’t matter, any more than it matters whether Twilight is “Teen Romance” or “Dark Fantasy” or “Young Adult Horror”; what matters is that similar things get filed together. As was noted in David Allen’s “Getting Things Done” book, filing systems are not so much about ensuring everything is in the right place, because that is always a hopeless dream – it’s more about vastly reducing the number of places where something might be. If I wanted to find a game with gameplay like Realms of the Haunting, it might have been filed under ‘shooter’, or ‘adventure’, or ‘horror’ – but that’s still far better than me having to start at ‘A’ and examine every single box until I get to ‘Z’.
It also becomes much harder to familiarise customers with new brands when each brand exists in a vacuum. To revive a previous example, if I wrote a novel about teenagers falling in love with werewolves, the book stores would shelve it right next to Twilight, and any Twilight fan looking for more reading material in that store would see the books together and instantly have a good idea that my novel might be to their liking, even before reading the blurb on the back, and even if they didn’t see the big sign saying “Teen Supernatural Romance” above the shelf. Games stores have spectacularly failed to address this aspect of cross-selling. I suspect this has helped to perpetuate the hit-driven nature of the industry, making it harder for new games and properties to get attention because non-hardcore gamers have no idea what the gameplay is like. This is trivial to address, but for some reason still hasn’t happened.
It’s interesting to note that when games spawn ‘clones’, the mainstream industry tends to react negatively. But when books spawn clones, book stores spot the trend and open new dedicated shelves for them, because genre fiction is the backbone of the book world. Do games need to rehabilitate the humble act of evolutionary improvement? For an industry that spends so much on content, arguably far too much, we seem rather dismissive of anybody that presents all-new content if they recycled the gameplay in some way. Gameplay is king, certainly – but it appears that we’re maybe expecting an unrealistic level of novelty from it.
Misunderstanding the way people buy games
GAME have long supported pre-orders of games, and in recent years they’ve also had midnight openings for big releases like Modern Warfare 3. They see the signs that many of their customers know exactly what they want, often months before the product even exists yet.
So, why do they sprinkle so many shops around in the same town, as if expecting people to spot a shop front from the corner of their eye and drop in to buy games on impulse? Video games are not snacks or drinks that you might pick up randomly while wandering round doing your shopping. Nor do the different shops offer any different stock to make it worthwhile having different stores. The only thing that differentiates some of them is that the Gamestation line of stores are aimed at a slightly more hardcore audience than the safe-but-sterile GAME stores – but even this distinction will come to an end with the imminent rebranding of all Gamestations as GAME stores. The end result is that most towns and cities will have 2 or more identical shops selling identical products to the same market.
This has been a problem for GAME since it was called Electronics Boutique – at one point they had 4 identical shops here in Nottingham, and I think that was alongside 1 or 2 GAME shops before the latter chain was bought out (with that brand persisting to today, obviously). Up until going into administration in March, they had 2 GAME outlets and 1 Gamestation here. The only other retailers with this many stores in the city centre are convenience stores, bakeries, coffee shops, and McDonalds.
GAME should be consolidating into fewer, larger stores. This would cut their costs and probably allow them to broaden their range too. Really they should have spent money on doing this instead of buying Gamestation back in 2007, but it’s a bit late for that now.
Failing to exploit bricks and mortar benefits
People often go into shops to browse. The lack of organisation mentioned above means that browsing through video games is a slow, fruitless affair. And the lack of variety means that you’d unlikely to find much of interest anyway. A retailer needs to exploit the fact that someone has chosen to walk into their shop by showing them lots of interesting things that they could buy. Instead you get an alphabetically sorted rack of games, and often a fabricated “top 10” chart with 4 copies of the same game standing side-by-side.
If you go to a book store, you can pick up a book and read it right there without paying a thing. They provide chairs and tables for you to do this. If you like the book, often you buy it. They were doing ‘free to play’ long before games developers caught on to the idea. So why do games shops make it difficult to actually play the games before I buy? My local HMV, a music and video store that has a small range of games, actually has more playable consoles in-store than the nearby GAME, which appears to just have 1. It’s absurd.
And as much as I hate being harassed by shop assistants, you can imagine that with the complete dearth of tools available in such shops to discover new games that might be of interest to you, it might help to have people on the shop floor who can help you find something. But this doesn’t happen either. Lots of the staff are knowledgeable gamers but you’re unlikely to actually talk to one until you’ve already made the decision to buy. This must mean many lost sales.
Many are saying that high street game retail is dying – but it looks to me like a self-inflicted wound. There doesn’t seem to be a lack of people who are willing to buy products from a shop when they could buy online for slightly cheaper – but you have to make it easy and worthwhile for them. Which GAME has not come remotely close to doing.