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Could we go back in time?

August 18, 2009

I blogged yesterday that there is no way back….

Or is there…?

I have been lamenting for a while now the inevitable fall that would become the gaming industry as the retail landscape sucked it up as another casualty on its unending commoditisation of society. The only markets that have been able to resist the supermarkets and to a lesser extent the high street generalists are those that treat their products as brands, and make sure that they are continued to be held in the high stead that top brands should be. You will not find fashion and sports brand clothes in supermarkets. To the extent that, for example, discount sports chains have bought up the producers of some of the lesser brands so they now own the producers. Nike and Diesel and Adidas and countless other brands continue to maintain their margins by controlling the route to market much more effectively.

I have recently got into cycling (tangent coming – be warned!). I have found that my need to keep fit coupled with a dodgy knee that doesn’t like running as much as it used to, has lead me to try riding bikes as a means of keeping in shape. So when I decided to buy a new bike, I was surprised to find that the retail landscape follows much more the fashion model than the games model. I had decided that I wanted a Trek racing bike (they are the ones Lance Armstrong rides so they must be good!!!) but I could not buy one online!!?!? Surely, anything is available online now – I thought! As it turns out, however, Trek is only available through specialist dealers (of which there are many) but these dealers are asked by Trek not to sell their bikes online. Of course, competition law cannot force Trek to stop a dealer but the possibility of loosing your dealership keeps them inline. It also means that dealers don’t discount too much, as they don’t need to – where else are you going to get a bike from? Trek knows this dealer network well and can predict what each relatively small business will sell each season, so can adjust manufacturing largely to suit. There have been some issues this year where demand has outstripped supply but largely it is a relationship that works for manufacturer and retailer.

So what if this were to happen in the games market? Developers and publishers could distribute their games through a select group of retailers, licensed to sell said publishers product and conforming to a code of conduct published jointly that was visible to the customer. Customers would know that they were getting a quality product from a reputable and knowledgable retailer, fully backed by the publisher. In return the publishers would know largely how many games were going to sell and what they could make from a game, and if the specialist retailer were making enough of a margin, they wouldn’t need to sell pre-owned games. I asked my local Trek dealer if they sold pre-owned bikes (hoping I might get a cheaper deal on last years model!??!?). His answer – they don’t do it. Too complicated and time consuming when we make good money on new bikes!

A pipe dream? Probably, it would take a very couragoues sales director at a big publisher to decide that they weren’t going to sell games through all channels and were going to take only certain routes to market. But for the life of me, I cannot see any pitfalls for them if they did???

And in my previous blog, I was critical of a large publishers decision to change the way they go to market by increasing the price of Call of Duty Modern Warfare 2. Maybe, that sales director should just go the whole hog and treat his (or her) game and all subsequent games as the revered brand that they actually are.

Call of Duty will undoubtably be the best game of the year – don’t let it succumb to the retail market like all other previous big releases have. Don’t let consumers pick it up as a loss leader when they are buying beans and bread.

If publishers did look to control the route to market, Playtime may or may not benefit from that but I don’t think the publisher will loose out. Food for thought…..

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