Do we need High Street shops?
It's a legitimate question, particularly following a year where digital games made more money than boxed ones (according to the latest estimates, at least).
If the future of this industry is in downloads, or streaming, or some combination of the two, how can a retailer – which has rent, staff and bills to pay – hope to survive?
GAME thinks it has some of the answers. It believes it can take a major slice of that digital revenue, and last year it claims that 2m of its customers bought digital content from its outlets.
But it also believes the future of the High Street shop is in marketing or – to use a not-so-dirty word – education.
The on-going development of digital makes a physical experience more important than ever,” insists David Howard, stores director at GAME Retail.
We're entering a new generation of gaming and people are looking for guidance and help in unlocking the potential of everything their new consoles can do. On top of that, our non-gaming customers – those buying gifts, for example – need help to get their heads around digital and what it is, how they can purchase it and what it means for gaming. Education is key and there's no better place to get that than face-to-face in our stores. We have made content available for customers to experience in all of our stores, there is nothing better than seeing games in action.”
As part of GAME's changing identity as a retailer it has overhauled the look of its stores. The latest design features more merchandise, more digital areas and two huge bays dedicated to Xbox and PlayStation.
Our non-gaming customers – those buying gifts,
for example – need help to get their heads around
digital and what it is, how they can purchase it and
what it means for gaming. Education is key and
there's no better place to get that than face-to-face
in our stores. We have made content available for
customers to experience in all of our stores, there
is nothing better than seeing games in action.”
David Howard, GAME Retail
It's certainly striking, with giant green and blue sections facing off against one another. But it still looks like a GAME. There's still plenty of space for physical products. So surely – as the number of boxed games reduce – there will be a need for another redesign?
It never stops,” says Howard. The digital world will constantly develop and we will continually invest in our store estate to give the best possible digital service. If you've been in any of our stores in the run-up to Christmas you'll have seen our dedicated Sony and Microsoft bays which have dedicated digital sections, touch screen technology and digital content for customers to engage with.
This is about offering an incredible physical experience to help customers understand and engage with digital on their terms. We have also launched Nintendo experiences in our top stores for Wii U and 2DS and 3DS.”
The additional screens and play areas are crucial to GAME, which has opened up its 330 store estate to publishers looking to promote their latest blockbusters.
The firm ran a number of 'lock-in' events last year, where gamers were invited to visit the shops after hours to play the likes of PlayStation 4, Xbox One, Assassin's Creed IV and The Last of Us.
Events are fundamental to what we do,” Howard continues. We knew from our research that they would be successful, but they blew our expectations out of the water. Our midnight launches continue to be hugely popular and we're always developing our midnight proposition; the launch nights as official partner for both Microsoft and Sony were incredible and we're getting involved in even more stuff in 2014. Both physical and online events are incredibly important and the two will cross-over.”
GAME believes it can survive in this turbulent industry by running events and selling hardware and digital cards. A bit like a Games Workshop mixed with Clintons and the Apple store.
It's a strange model in that there's really nothing on the High Street to compare it to. But selling digital downloads is not quite so foolhardy or risky as you may think.
Whereas a physical game costs retailers significant sums of money to buy upfront, a digital one does not. Publishers don't get paid until after the game is sold, which allows retailers to stock more titles without the risk.
And GAME wants more. CEO Martyn Gibbs told attendees at
last year's London Games Conference that he wants to stock every piece of digital content available. And Howard tells MCV that the firm also wants better visibility on what digital products are coming to market.
The amount of digital content is going to keep growing and we embrace that,” he says.
We help people to access that content. Could we have better visibility? Yes. We're working with our supplier partners on that and getting better visibility will help us develop the best possible customer experience. In short, we are already a very significant proportion of the market and are selling a huge amount of digital content – with better visibility we will sell even more.”
GAME does not view digital as a threat. In fact, it argues that the sheer complexity behind all the business models and platforms makes its existence on the High Street essential.
"Could we have better visibility? Yes. We're working
with our supplier partners on that and getting better
visibility will help us develop the best possible
customer experience. In short, we are already a very
significant proportion of the market and are selling
a huge amount of digital content – with better
visibility we will sell even more.”
David Howard, GAME Retail
There is an incredible wealth of content available – how do customers know what there is, what it's like, how good it is? Customers want guidance, and the training we give our store teams sets us apart from everyone else,” adds Howard.
GAME is confident in its plan, and it has been proactive in enacting it since its collapse two years ago. But there's no denying it sounds strange. Even with a reward card and the ability to trade-in products, will customers really choose to buy from a High Street store when they can get it directly from the source?
GAME certainly believes so. It believes its events, its rewards system, its online components and its new-look stores can work together to make GAME a place that gamers gravitate towards. A place where gamers can meet and discover titles.
We have a really clear and sensible strategy and all the work we've done over the past 18 months means we're in a strong position to grow our online and digital sales,” concludes Howard.
We've invested in our technology infrastructure and have an excellent platform for supporting our store teams and delivering the best digital experience in the market. It means we can work hand-in-hand with our supplier partners to grow the size of both the digital market and the market as a whole.
GAME is in a very good place now – with a significant market share, with free-to-play options, with our in-store, website, app and m-commerce developments and with our supplier relationships, we have a great opportunity to grow the market size for digital.”