With school holidays traditionally a strong sales period, GAME was first off the blocks making price cuts of up to £10, although rival chains have reacted swiftly to match the offer.
But, as ever, the discounting activity has placed independent retailers in a tough position, with many unable to compete.
“The larger chains can afford to lose profits by selling closer to cost price, but for us that’s simply not an option,” blasted Will Copeland of One Step Beyond in Norwich.
Steve O’Brien, who is heading up the new Independent Retail Group, added: “This year is proving to be more transitory than we had expected. Independent retailers will have to seriously consider whether it is worth stocking upcoming triple-A titles at this price point. What can we hope to achieve by driving prices down?”
HMV, meanwhile, believes the discounting is indicative of a different problem within the market. “There would not be so much pricing activity if new products were coming out every week, like on DVD,” a senior HMV source told MCV.
“As it is, retailers are forced to play about with prices.”
All eyes are now on the upcoming release of SCEE’s Gran Turismo 4 and Konami’s Metal Gear Solid 3, with retail pinning hopes on both being able to hold the £39.99 price point.
Sony has refused to comment on the situation. However, a Konami spokesman pointed out that, although software prices may have to drop at some point, greater competition from “non-specialist retailers” has forced RRPs down earlier than expected.
GAME has not denied that the price cuts could be extended indefinitely – which will surely concern many. “As with any offer or promotion, we will review its performance,” said buying director Alex Croft (pictured).
“Competition is always a factor, and promotionally priced software is becoming a much bigger part of the overall mix.”
Advertisement
