Japanese games retail "could vanish in the next five years"

Specialist game retailers may be dead in Japan by the end of the decade, it has been warned.

Kotaku reports that a Japanese games retail employee named Osho who works in sales for games chain Pao believes that the combined threat of online retail (specifically Amazon), the rise of digital and dwindling boxed game sales is slowly killing High Street specialists.

"Real-world game specialty shops will not survive [in Japan]," he said. "It seems like they’ll completely vanish in the next five years.

Osho added that while "there is a reason to come to your shops then the increase in customers is directly tied to the resulting profits", this is no longer viable as the rise of digital means that the need to head out shopping is no longer there.

Of course there is nothing uniquely Japanese about this phenomenon. MCV has over the last decade seen a significant decline in the UK games indie sector, although it must be noted that many still survive – and more than that, plenty do very well for themselves.

There are also some uniquely Japanese challenges that make the situation even worse on that side of the globe. The console market is hugely down year-on-year, with mobile gaming enjoying massive uplifts and consumers continuing to favour portables. It’s different in the West where handhelds are fading but next-gen consoles have to date been very successful.

Regarding retail, diversification is certainly one key (Osho says that Pao is doing well since branching into trading cards) but it doesn’t end there. GAME reckons that in 2013 as much as 35 per cent of digital console software purchases were made at UK retail, where shoppers can trade-in old software and hardware and, perhaps more importantly, buy digital content with cash as opposed to credit or debit cards.

But with GAME predicting that digital software sales will achieve parity with physical by as soon as 2018, it’s impossible not to ask question of the long-term viability of High Street game retail.

After all, as recently as three or four years ago supermarkets saw games as the next big boom sector but have since largely retreated, leaving specialists to fight it out with the internet. But on the presumption that physical’s share of the market will continue to dwindle, how long until the remaining pie is not big enough to sustain both? The collapse of the independent music retail sector certainly looms large.

Image credit: Kotaku