'Stop the price war'

Christopher Dring
'Stop the price war'

The UK games market must stop slashing prices, or its worth will be eclipsed by other European territories, Konami has warned.

The publisher’s Euro chief Kunio Neo told MCV that the UK market is suffering, while other territories like Germany are thriving.

His words come as a fresh price war erupted around Square Enix’s Deus Ex, console versions of which went on sale for £21 last week as GameStop.co.uk moved to secure market share. Tesco followed suit with a £30 offer on the game.

“UK games pricing is very poor,” said Neo. “Retailers are always reducing prices and the profits for publishers are getting smaller. The UK is really suffering. And he said that Konami is far from the worst-off publisher in this situation.

“We’re based in Germany and despite the economic conditions in many other countries, Germany is doing alright. So we’re not as affected as a US publisher that has a UK office. They’re suffering because they focus their sales on the UK.”

Konami’s European GM of sales, marketing and products, Martin Schneider, simply added: “Tell the UK shops to stop the price war.”

But the UK boss for a global publisher said the price war has its benefits. “I am envious of my opposite numbers in France and Germany – they never have to have the conversations I have. I get many calls giving me grief when our games are discounted, but there’s nothing I can do. Legally I can’t make them put prices up.“

While it can be frustrating, the result is that we do sell more boxes. Other firms talk about devaluing the market, but I bet they don’t mind when they see how many extra units they’ve shifted. The sheer number of UK games retailers means shops are having to be more aggressive with prices,

Bee.com’s Gian Luzio said: “It’s extremely competitive. Whereas other countries have one or two major players we have at least ten with five per cent plus market share. This means the customer has more choice and the retailer must fight to win that customer by offering a balance of price and service.”

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Tags: uk , video games , high street , konami , price war , struggling

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4 comments

Caught between a rock & a hard place, it would seem.

Joseph Brown

Joseph Brown INDUSTRY
Sep 1st 2011 at 12:48PM

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This issue never goes away and never changes. The discounting (in the UK) has nothing to do with there being more chains with significant market share; the same could be said of many Euro zone countries but they manage to work to RRPs just fine. Proof that people will pay a fair price for a good product (notwithstanding all Euro zone countries) was evidenced during the 3DS launch when Game grabbed the largest market share whilst charging more than most of it's rivals. A stalling market cannot be blamed as this situation has been around since before the last peak was witnessed. There used to be a happy medium between on-line and retail prices, with consumers and retailers alike understanding the limitations of buying boxed prodict via the 'net. and of course this isn't an exclusive issue for video games, but it has affected the business in a slightly differnet manor to that of, for example, music or DVD. I have no doubt that video games can sell at their intended RRPs but it will take a monumental effort for retailers to legally manage the situation. What's ironic in all of this is the basic fundamentals of retail AND economics seem to have been forgotten. On the upside, we've long-lost the "rip off Britain" tag...

Nik Blower

Nik Blower INDUSTRY
Sep 1st 2011 at 2:58PM

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I must admit this has got to be one of the most screwed up industries i have ever been involved in
A Game Launches on the Friday, and everyone fights for the footfall traffic to make about £2.00 Profit
but then the Fight starts one sells at £34.99 The other at £29.99 and why Because they sell Bread and milk
that they can make the short fall up knowing they make over £1.00 on every loaf they sell.
Then in less than a Month the game drops to £24.99 via online retailers fighting for Business again knowing they sell other items that the make a real profit on unlike New Games titles. I hate to say it but the only one that benifits from this is the consumer, They dont care who has the best service its all down to price,
Ref the Tag "Rip off Britain" it is still there but it is now on all the items you have no control over
Gas, Electric, Petrol & Foods, Hence why Luxury goods are classed as non essential purchase now.

Matt Boyce

Matthew Boyce

Matthew Boyce INDUSTRY
Sep 2nd 2011 at 12:04AM

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Perhaps the Publishers should look at the MARKETING MONEY they pay Online retaillers and supermarkets.It is well known that they reduce the sale price in the first week because they offset the MARKETING MONEY AGAINST THRIR MARGINS. Take away marketing money and retailers wiil have price sensibly to make a profit. If we are sell at the same price our customers will choose their retailer on the best customer service and overall experience.
A fairer way

Simon Gough

Simon Gough INDUSTRY
Sep 2nd 2011 at 9:59AM

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