MCV’s 2013 Annual Retail Survey

MCV quizzed over 100 games retailers from across the UK – including both independent shops and the big chains – about the highs and lows of 2013, what will be the big sellers in the New Year and the ever-growing digital market.

Here’s what they told us…

What was the highlight of your 2013?

There was no question that this year’s survey would be dominated by Sony and Microsoft’s new hardware launches. In fact, the next-generation consoles have an overall share of 73 per cent of the vote.

Sony’s PlayStation 4 received the biggest vote for a single console with 35 per cent, while Xbox One only received two per cent. Retailers praised the new hardware for reinvigorating the market – it had been down following the release of Grand Theft Auto V and prior to the launch of the next-gen.

Fewer individual titles were nominated this year. Rockstar’s Grand Theft Auto V was the only game to recieve more than one nod with a quarter of the vote, after having had the biggest game release – by quite some margin – in the history of the UK video games industry.

What has been the biggest challenge facing your business?

It’s hardly surprising that getting next-gen stock was the biggest problem facing games retailers this year. Many indie retailers complained about the size of their allocation compared to supermarkets and chains.

17 per cent of retailers said that they were finding it difficult to keep up with the sheer demand for next-gen hardware.

The next biggest problem facing retail is… other retailers. 12 per cent of respondents complained about supermarket pricing, while 16 per cent complained about online retail.

Which UK distributors would you commend for outstanding service?

Centresoft continues to be extremely popular with UK retailers – rising to an impressive 88 per cent this year from last year’s already stellar 59 per cent.

The biggest factor in this was the firm’s handling of Sony’s PlayStation 4, with indies praising the sizeable allocation of stock received and the quantity and quality of point of sale materials the distributor provided.

As well as Sony, CentreSoft also handles releases from Activision, EA and Warner Bros, all of whom have had best-selling titles this year such as Call of Duty: Ghosts, Battlefield 4 and LEGO Marvel Super Heroes.

Exertis Gem comes in second place, but the gap between the two distribution giants is sizeable. The company handled Microsoft’s distribution this year, including the Xbox One, of course. Many retailers said they were unhappy with the allocations they received from the distributor, while those praising Exertis Gem’s service said the firm didn’t push extra hardware on them as CentreSoft did with some stores in the UK.

What games publisher had the best quality games and attitude towards retail?

Sony won over more than a quarter of the retailers MCV spoke to, in no short part due to the phenomenal success of the PS4. But as well as its new console, retailers were impressed with the quality of the games the publisher has produced such as The Last of Us.

In second place is EA with 21 per cent, a slight increase on last year’s 16 per cent. Many retailers also said they voted for the publisher due to their change in opinion over the pre-owned market which is the lifeblood of many retailers in the UK.

Rockstar stole 19 per cent of votes with Grand Theft Auto V. This is largely due to the fantastic sales it produced, but also due to their relationship with retail. Many store managers praised the publisher for dealing directly with individual stores about their allocations.

What new product are you most looking forward to next year?

The dawn of a new console generation is synonymous with the rise of fresh new IP and considerably more than three-quarters of retailers chose all-new properties as their most anticipated product of 2014.

Leading the pack was Ubisoft’s hacking title Watch Dogs with 38 per cent. Nearly all retailers who chose this answer expressed their disappointment that the title had been delayed until the New Year, as it undoubtedly would have further driven launch console sales.

Titanfall and Destiny also scored well, taking away 17 and 21 per cent of the vote respectively.

Two per cent of retailers said they were most looking forward to Microsoft’s follow up Xbox One. MCV doubts this will come out, but if it does, you read it here first.

What third party peripheral firm provided you with the best sales this year?

Headsets continue to be the most popular accessories on the market with headset specialist company Turtle Beach stealing the show.

The firm has produced many high quality gaming headsets this year including several to tie in with Activision’s Call of Duty: Ghosts and it walks away with 46 per cent of the vote – a considerable increase on last year’s 27 per cent.

Of that number, nearly three quarters were replies from GAME stores, who have stocked a number of exclusive headsets.

In second place is Orb, which was praised for its variety of high quality but low priced accessories, including console controllers as well as its Xbox 360 gamepad rechargeable battery packs.

Gioteck took 10 per cent of the votes – down from last year’s 15 per cent – and retailers praised the quality of its AfterGlow headsets.

What games hardware do you expect the best sales from?

Retailers have been outspoken regarding their support for their next-gen and the results here don’t lie as most predict the next-gen consoles to be the hottest hardware moving into 2014.

UK independents told MCV earlier this year how Sony had ‘won the hearts of indies’ and that certainly rings true as 78 per cent of retailers predict the PS4 will outsell any other platform. Fellow next-gen device Xbox One ranks in second claiming just ten per cent of votes.

But despite only a single per cent of retailers forecasting the current-gen machines to top sales next year, the majority of outlets still expect demand for the likes of the Xbox 360 and PS3 despite being overshadowed by their bigger and newer brothers.

Elsewhere, not a single retailer expected the PC to provide their best sales while another single per cent of stores predict controllers and accessories to top sales.

Do you predict your Christmas takings will be greater than, the same as or lower than last year?

The market has certainly picked up of late with the release of blockbuster titles GTA V and Call of Duty:?Ghosts, followed by the debut of the next-generation, and retailers expect this trend to continue throughout the Christmas period.

74 per cent of retailers anticipate their Christmas takings will beat last year’s with demand for the Xbox One and PS4 fuelling this growth.

Three per cent of retailers were concerned that consumers would be spending prior to the festive season at the console launches and therefore would not be spending at Christmas.

This year’s survey reveals retailers to be far more confident than last year, which provided a mixed reception as stores recovered from facing a tough market in 2012.

But the stock issues surrounding the next-generation consoles are having an effect as the 17 per cent of retailers who expect the same or lower takings than last year blame the lack of consoles.

What proportion of your customers traded-in games against your next-gen consoles purchases?

The number of customers who traded-in their current-gen games and consoles varied quite significantly amongst the retailers we questioned.

In a very close race, the results show 34 per cent of retailers saw around half of their customers opt to offload their current gaming setup to fuel their switch to some more up-do-date hardware.

Elsewhere, 29 per cent of outlets revealed the majority of customers traded-in hardware to offset the cost of their Xbox One or PS4 – with one retailer saying that 100 per cent of its customers traded in at least one product against the new consoles.

But the 25 per cent of retailers who saw few trade-ins blame the lack of backwards compatibility on the new machines meaning fans are staying loyal to the current-gen.

Despite the pre-owned market being seen as a big part of games retail, seven per cent of stores asked said they do not deal with pre-owned titles and games consoles.

Do you feel confident about the health of your business moving into 2014?

A huge 97 per cent of retailers we surveyed expect their business to blossom in the New Year, driven by the arrival of the next-generation and the line-up of blockbuster titles set to debut on the new machines.

Retailers listed the likes of Titanfall, Destiny and the highly-anticipated Watch Dogs as products that will give the new console generation a second wind post-launch and drive sales in the New Year.

Many of these retailers said they have diversified their stock to compete, including selling stock over eBay and their own online outlets.

One retailer cited Microsoft’s turnaround as their reason for saying yes because otherwise,?retail would have less of place. Another said they wanted to see more support for indies from publishers and distributors.

But some remain more hesitant about their business. Two per cent of retailers still claim issues such as competition within their local area and the rise of digital as the biggest threats to their business.

Do you want and feel able to get involved in the digital games market?

In an?effort to counteract the rise of digital and the increasing number of consumers turning their back on the High Street for the comfort of their own home, retailers are confident in getting involved with the digital market.

A whopping 86 per cent of retailers surveyed said they wanted and believe they would be able to enter the digital market.

82 per cent of independent retailers MCV?spoke to praised Sony’s partnership with CentreSoft subsidiary DLC Soft for providing them with download codes, while 24 per cent of independent stores said they want a similar service from Microsoft, Steam and Nintendo.

A small number of retailers also highlighted Steam Wallet codes as a popular product amongst consumers driving the growth of digital on the High Street as gamers value the ability to trade-in products for titles on Valve’s digital store.

But 14 per cent of stores remain threatened by digital and the lower profit margins or lack of demand from their customers prevents them from entering the sector.

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