It's been a busy 12 months for GAME, following the High Street retailer's acquisition of eSports specialist Multiplay, hectic Black Friday last year and return to the PC space.
MCV asksCEO Martyn Gibbs (pictured, left) and CFO Mark Gifford (pictured, right) about the firm's GAME plan for the next 12 months – and beyond
ON GETTING BACK INTO PC...
Ten years ago, the High Street effectively abandoned the PC games market, giving rise to digital distribution in a major way.
GAME admits that it was too quick to abandon the platform and, with the aid of Steam and its newly acquired eSports division Multiplay, hopes to reclaim some of this sector.
We are well aware of where we have not performed and not given our customers the offer they deserve, and PC is top of that list,” confesses GAME boss Gibbs.
It is fair to say that with the acquisition of Multiplay, they have taught us a lot and we have a much better understanding of the approach that we need to take for our PC customers.
"Both from a PC digital point-of-view and a PC accessories perspective, we are seeing immediate traction with understanding the market far better. It will continue to be a real focus for us as we move into 2016.
We have a very good relationship with Valve. The guys at Steam are just really aiding all of our efforts to really close the loop. We have been very strong on console for many years, and when PC moved digitally we didn't move with it quick enough.
"We are now in the position where we have the right supplier partnerships, plus the right internal talent, to drive that category forward.”
ON SLOW PHYSICAL GAME SALES...
According to GfK Chart-Track figures, UK boxed game unit sales are down 10.3 per cent year-to-date, while revenue has dropped 6.5 per cent.
It makes for concerning reading, particularly for High Street stores. But Gibbs is optimistic that the picture will change.
If you look at the release schedule year-on-year, we had Destiny and Shadow of Mordor come out earlier last year,” he says. This year we have Battlefield, Call of Duty and Fallout in November, so the way we've expected things to phase is that September and October would be softer, and November stronger.”
He adds: Those three games are coming out within 14 days. In terms of volumes of products, we still haven't got 15m people that own a new-generation console – so we are hampered a little bit by the amount of console owners. But we think all three of those are going to be real successes.”
ON ITS ESPORTS AND EVENTS BUSINESS...
GAME spent 20m acquiring eSports specialist and events organiser Multiplay in March of this year.
Since then, it has embarked on a recruitment drive, moved the Insomnia events from Coventry's Ricoh Arena to Birmingham NEC, developed a small Insomina event in Spain and is now eyeing more international territories.
It is also hoping to bring eSports to the GAME store estate.
We have a couple of bigger stores that we are trialling, and part of that is around eSports and how we are going to do that within a shop environment,” says CEO Martyn Gibbs.
We are early stages on that. We see eSports as an engagement both in and outside of stores. We will talk to our strategy on eSports over the coming months; it is very differentiated to what we are seeing and where everyone else seems to have focused at the moment.”
He continues: We have just moved Insomnia from the Ricoh to NEC, and the first one of those will be in December. We run Insomnia three times a year and we know there are opportunities to run that event in places where people can't actually access it at the moment – from a UK perspective. We did a small Insomnia experience at the Madrid Games Week, and we are in discussion on other international territories as well.”
There will be other non-eSports events, too. Although don't necessarily expect a rival to EGX.
We are doing other retail experiences with publishers this Christmas and we see a great opportunity to do more and more gaming events,” adds Gibbs.
These are the sort of occasions that we don't see happening anywhere. This is not the case of doing something that someone else is doing in other territories.”
ON BLACK FRIDAY BLUES...
Black Friday returns to Britain on November 27th, and it's going to be big.
Last year's pre-Christmas sales event resulted in severe discounting on recently released games as well as Xbox One and PS4 consoles.
Yet the overall performance of Q4 last year was within analyst expectations – it seemed that rather than increase sales, Black Friday simply meant consumers bought their Christmas presents during November rather than December.
It begs the question: is Black Friday really beneficial to the games business?
We see Black Friday very differently to anyone else,” says GAME boss Martyn Gibbs.
It is not about just one day for us, it is about recruiting customers into the GAME ecosystem and community. We have seen the amount of people that bought a console from us on Black Friday last year, but it is the amount that have engaged with us since which is the key point. We are set-up well commercially and operationally, but for us it is about the opportunity of recruiting tens of thousands of new customers.
"Customers would much rather stand in a queue and walk out with a carrier bag with their goods than press refresh a lot."
Martyn Gibbs, GAME
GAME says it is preparing its website for the Black Friday rush, but believes it will be in-store that benefits the most from discounting this year.
We have been getting everything focused around the amount of traffic that we believe could potentially come to us on Black Friday,” says Gibbs.
We have done a lot of research and it is very interesting about how customers see Black Friday. There is a tranche of customers that are saying – and this isn't a GAME point – that they want a shop to go to on Black Friday. They would much rather stand in a queue and walk out with a carrier bag with their goods than press refresh a lot.”
CFO Mark Gifford adds: Customers are savvy and they remember very well what happened last year. Will Black Friday be bigger this year? Of course. You'll see from the research that people are holding back their purchases until then.
"But there were a number of websites across the country that did not perform well on Black Friday last year. More than that, the entire distribution network across the UK started to fail. There just weren't enough reliable deliveries and, when it's somebody's Christmas present, consumers don't want to take that risk and will trust going into the store much more.”