Archive for the ‘playtime’ Category

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If at first you don’t succeed…

March 26, 2012

Todays events at GAME and GameStation have brought back some memories for all of us at Playtime, some of which are not very pleasant. When I say to all the staff at the GAME Group “We feel your pain” it is from first hand experience.

Playtime (originally known as Playtime Multimedia Ltd) went into administration in March 2009 – three years ago to the day – that GAME did.

And for the very same reasons. We found out first hand that it just isn’t possible to run a profitable business on the high street, selling just games.

We didn’t have 606 stores when we first closed – we had 10. We didn’t have 5,500 employees, we had 53. But the similarities are striking.

We got into retailing because we loved games, and wanted to work with them. That’s how GAME and Gamestation both started. And we grew as gaming became more mainstream, just like GAME did!

But when the supermarkets move in, there’s very little any specialist retailer can do. Online has grown but over 70% of games are still sold through conventional boxed retail channels.

It’s just that most people don’t come shopping on the High Street now. Shoppers flock to supermarkets for their weekly “one-stop” shop and pick up the latest release there, or they go to the huge shopping centres where they can park and “leisure shop”.

Any business analyst will tell you that most businesses need a Gross Margin of at least 30% to be sustainable. Supermarkets do it by margin mixing. High street brands do it in shopping centres like Bluewater and Meadowhall by selling expensive, premium brands.

Single product, specialist chains like Playtime and GAME are not sustainable if they have to sell most games at the prices customers expect to pay! And in any free market, that is the price you have to charge. I’m not complaining. I’m a great fan of the free market, even though we have suffered at the hands of it. If you get knocked down, get up, you brush yourself down, and try again!

I’m sure it would have happened a lot earlier to us and to GAME, had it not been for the pre-owned part of the games business. Margins in this area are much closer to the 30% GP required than they are for selling new games. Perhaps though that just stayed the execution.

So try again we did. We only have three stores now and we have diversified, both online and into collectables & other game related items. To be honest though, it still doesn’t make any money. We do it because we have lease commitments to meet and we are still gamers at heart – we love being around games & gamers!

I’m sure GAME will return too. Maybe not with 600+ stores. But if they can find someone to service the debt they’ve built up (or even wipe it out) they can then start again with a lower cost base.

There are still people who want to buy their games from a specialist.

For the foreseeable future anyway….

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Pre-owned debate makes it to BBC

August 20, 2009

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!!!!

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PS3 slim comes with new firmware update

August 18, 2009

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….

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PS3 slim – more piccies and details

August 18, 2009

ps3 slim2 frontps3 slim from sideps3slim rearps3slim_official

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…

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The old debate and the new one….

August 18, 2009

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…..?

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View from the Counter

April 22, 2009

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.

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Console hard drives get bigger

August 12, 2008

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.