Pre-owned debate makes it to BBC

I read with interest that another publisher is complaining about pre-owned games. But this time it has made it all the way to the BBC!!!

I shall summarise – we can’t make enough money and we blame exchange rates yadda yadda yadda online retailers yadda yadda yadda pre-owned games yadda yadda yadda

I don’t have a problem with anyone making profits but when my business doesn’t make money I don’t look to blame others – I sort out my own ship!!!!

PS3 slim comes with new firmware update

Version 3 of the update will of course be available to current PS3 users but one thing I did notice that was interesting was that BBC iPlayer will be integrated into the XMB – very cool.

If it is fully integrated and allows downloads for later viewing – as on PC’s – then the new 120GB version might be even more interesting….

PS3 slim – more piccies and details

Only two USB slots, so I am gonna need a hub and looking at the picture from the rear, it looks like the power brick might have been moved to the outside of the machine.

This is to be confirmed but it is how they achieved the slimming effect when Sony released the PS2 slim…

The old debate and the new one….

Over the past few weeks I have been reading views from many in this industry we like to call gaming – all commenting on the impending release of Call of Duty 6 or Modern Warfare 2 or Call of Duty 4 Modern Warfare 2 or whatever it is called this week. When Activision originally announced that it was going to charge £5 more for the game when released, it seemed to go relatively un-noticed and I think some at Blizzard Activision might have thought they could dodge this bullet yet. But slowly and surely, most parties have been coming out and having their say.

To summarise so far, I think those in the developer ‘camp’ largely welcome the move and will look to the effect on the games sales performance to see whether they can follow Activision’s lead. After all, it wasn’t that long ago when we were regularly selling new release titles (not always triple A either – Turok on N64 anyone?!?!?) for north of £60.

The retail camp (for me at least) seems to fall into two sub-categories – those who take the view that increasing prices is anti-consumer and those who support price increases on the basis that they would like to return to the hey day of video gaming when they could charge the earth and the customer wouldn’t bat an eye!

So – three different views then. In camp one, developers (and publishers with them) argue that they are struggling to make profits in today’s crowded and competitive gaming market, so the move to increase prices is only natural if they are to survive. Of course, some have already done so – citing the currency fluctuations against the UK market as the reason for doing this. Nintendo’s Wii console increased in price to the trade earlier in the year and whilst we haven’t seen an increase in the retail price, there has certainly been less aggressive discounting and bundling on the Wii this year – even though the console is now available as free stock. I understand why developers and publishers are struggling but to a certain extent this situation is of their own making. For the last five years publishers have fought with each other to be the number one. EA for a long time held this crown and Ubisoft and SEGA have been pretenders to the thrown – all at one point or another at pains to point out to all who will listen that their market share is growing or was number 1 in the year so far or has been increasing year on year – or whatever. To drive this growth, they have been happy to commission title after title that is effectively a re-hash of a previous years franchise and publish licence after licence that is just a re-skinning of the same game with a different IP. So when gamers see this year after year, being asked to fork out more and more, they are bound to expect to pay less and less.

Supermarkets (and large generalist retailers) shall be know as camp two, and for years have played the role of the consumer champion so were happy to cater to this demand to pay less. By beating up the supply chain, as they have done in so many other industries, they could maintain their margins whilst offering the same to the consumer for less. Publishers offering marketing credits, campaign payments, volume discounts etc are only fanning the fire. Any retail buyer worth his or her salt will use the number of store fronts they have as a big battering ram on the publishers door. Give me the deal I want or I won’t give you the shelf space, store coverage etc you need for your second rate 2008 re-hash of four year old IP!!! Sounds harsh? – perhaps a little in the language but the point remains that as the quantity of titles published increases, the quality must diminish, and therefore the average price will too.

Don’t get me wrong – I have been as guilty as the next buyer. This is not a criticism per-se – more an observation. Economies of scale rule in the open market. Many would also argue – and I would be inclined to agree – that this is simply a sign of a maturing market and that market forces are coming to bear as technology barriars fall. More developers can do the work that only a select view were able to in the past, but that is nothing different to what has happened in a thousand other markets that have developed since time immemorial.

Camp three is the indie camp – watching all this from the outside looking in, hoping beyond hope that maybe at last after years of decline we might see an opportunity to charge customers more than we actually pay for games and make a bit of profit on new games for once. After all, those of us still here (or like Playtime, here but not in their original guise) and can remember back to the launch of the PS1 and the N64 (and others) would relish the opportunity to make those sorts of profits on new releases once again. Some have even linked this to the ‘old debate’ that keeps on raging, that is pre-owned games. After all, if we could make money on new releases again, then we wouldn’t need to offer the pre-owned route to our customers, would we. After all, it is a lot more complicated and costly to do in-store than simply selling 100’s of new release titles on release day at full retail and making 30% on each one.

But this is the nub of the issue – the market isn’t the same as it was 10 years ago. Things have moved on. Supermarkets have entered the game of selling games, general retailers too. They have taken customers away from specialists in the only ways they can – offering price and convenience advantages. Publishers (with developers in tow) fed this by conceding to retailers supply chain demands as they chased their own goals of growth and market share. Activision’s attempt to increase prices surely is a last resort in the face of inevitable downward price pressure. There can’t be any going back to the old days…..?

View from the Counter

So that didn’t work then did it….

Over the last five years, my brother and I tried to grow Playtime into a profitable business by opening a new store every 6-12 months.

Why do that? I hear you ask – well, it was a defense mechanism as much as anything else, the bigger you are the more we could benefit from economies of scale – marketing with publishers, buying professional labels, carrier bags etc, professional branding and merchandising in-store – the list goes on. Five years ago, we also saw the bigger indies doing well – Software Store and Eplay were winning awards and seemed to be going from strength to strength.

So why didn’t it work? Well, we were going well until last summer, then some American banker invented the words “Sub-Prime” and “Credit Crunch” and by the time we came out the other side of Christmas, we just weren’t selling as many games as we needed too. That it meant we had to shut the business should come as no surprise really – we are in a recession after all.

It is ironic that of the 10 stores we had when we shut, nearly all would still be profitable – if they were run by an owner operator – like most other “indies” are.

We found that we could run a couple of stores fine on our own, but when you get more than 3 or 4, you need to employ managers to do it for you – and good managers cost money, and they need area managers to help them, and purchasing managers to buy stock for them, and marketing managers to support them, and personnel managers to advise them – and the list goes on.

When you have the costs of a head office to cover, you need a lot more than 10 stores to make it work. This is the crux – in retail you either do it all yourself as indies across the country still do – or you need to have national coverage, to cover the costs of running a full head office. From our experience, there really is no in-between.

Console hard drives get bigger

So following the announcement by Sony that they are putting an 80GB hard drive in the PS3, the shortage of XBOX360 premiums is explained by the announcement from Microsoft that they will increase their hard drive size to 60GB.

This is all to do with storing digital content on your console, and I’m not sure how many people do that??

I store all my music and home movies digitally – but they are on my Mac. I can spool them over the house’s network to either the 360 or PS3 (using software on my Mac from Nullriver) but I would never store them there. No backups, cant edit them, take them with me, sync to my iPhone etc.

A computer is still required (for me) to do all the things I want to do with my digital media – and none of the next gen consoles have taken its place yet. Especially as I use a Mac, which is so media centric. What the consoles can now do, thanks to the software from Nullriver, is take the place of an Apple TV – a set-top device for spooling my media from my computer. One less cable to worry about.

Publisher product briefings

One of the advantages of running your own game business is that we have a good relationship with most of the publishers. In the last couple of years, especially since E3 changed, publishers have been giving retailers their plans for upcoming games in a good and timely fashion, and most importantly they have done this near to us.

What does that mean?

Well, we got our first glimpse of Mirrors Edge from EA in March, we saw Ghostbusters in June and last month Activision showed us code for COD5, Force Unleashed, Guitar Hero 4 and the new James Bond game (which BTW looks awesome!!!!)

Tomorrow, we are off to a THQ briefing where amongst other things I am hoping for a glimpse of Saints Row 2 – and next week Nintendo are showing us their products for Xmas 08.

It sounds crap but I still get excited about new releases and look forward to seeing all the new stuff on offer each year. I hope that I never get bites of it!!!

Playtime Barnsley – more piccies

I have added some more piccies of the opening to my gallery

Solid Snake Mannequin

Check out a couple of piccies for a mannequin we have put into the Meadowhall centre near Sheffield

www.playtime.co.uk – a blog about games

We have signed up to wordpress where we will blog about video games and anything related.

If that interests you too please feel free to comment.

Please also visit our website where you can buy all the games we are talking about:

www.playtime.co.uk

Cheers,

Gareth