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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….


Only three days till Sausages

April 1, 2010

Tonights dinner is Mushrom Risotto – one of the few meals I would choose to have even when I am eating meat. So when I am off meat for Lent, it is a very welcome option…

The recipe involves me just throwing in whatever we have to hand but always includes Mushrooms (obviously), onions, garlic and Parmesan cheese. Tonight also includes vegetarian stock, butter and seasoning.


The latest object of my affections…

April 1, 2010

I tweeted yesterday that I am currently going through a cheese phase. This is now taking hold to the point where I have had to put it on the blog….

with a picture no less.

This is a cheese & onion quiche from Greggs. Haven’t seen them in the branches in Sheffield or Doncaster but have just started partaking of these little beauties from the Greggs in the Nottingham Broadmarsh Centre – just up from our shop.



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…..


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…..?


After the dust has settled on E3…

June 11, 2009

So the doors have closed on another E3, and once again I didnt get to go – but then again, I’ve never been so I don’t know what I’m missing!!! Which is probably for the best!

So, what did E3 tell us about what to expect in the next 12 months and beyond?

Of the big three, Nintendo was largely a case of more of the same. Their current direction is working very well thank you very much, so for them to say anything other than “we will continue to plough this furrow” would have been insane. Follow ups to Wii Sports, Wii Fit, and Super Mario Galaxy prove that they arent going to change anything. They know their market and they are sticking with it. During their E3 press conference and since, they have said that they would like to re-engage with hard core gamers more as well, but I cannot see that happening. We know hard-core gamers and they are far too entrenched in the Microsoft and Sony camps. Even if they do look up from their GTA, COD or FIFA session, Nintendo dont seem to be offering anything along their lines.

As for Microsoft and Sony, well, I think Microsoft just edged it but both have a lot to offer the core market of gamers that we sell to.

The top ten list that IGN AU put together sums it up just fine for me – most games will come on both platforms, and where one has an exclusive like Splinter Cell: Conviction, the other has Uncharted 2. Customers often ask us which is best – 360 or PS3? And we always say “Neither – you have to have both, if you are a serious gamer”.

Exclusives will always be a part of this industry and so the only way to satisfy the addiction fully, is to make sure you get your drugs from both Microsoft and Sony. Purists like me will also say you need a Wii for the Mario/Zelda hit – and if you ask my brother, he says you need SNES, Dreamcast, NES, Megadrive etc etc etc – but that is getting off the point. This blog is about the future, not the past.

Coming back to that, both Microsoft and Sony gave tech demo’s on their answers to Nintendo’s Wiimote. Both very clever and both designed to bring more casual gamers into playing games. I have to admit – I think they both have missed the point. Although I didn’t really see it myself until earlier this week when I reflected on another presentation – Apple’s keynote at their World Wide Developer Conference. They have had huge success in a very short period of time, selling 1 Billion apps to an install base of 40 million users around the world. Not all these are gamers obviously, and certainly not hard core gamers. What some are and will increasingly be, are the casual gamers that Nintendo have succeeded in selling to and that Microsoft and Sony are courting with their tech demo’s.

As a little example, let me tell you about the picture of domestic bliss that is the Rowbotham household. I only tend to play games on 360/PS3/Wii and occasionally my PC – depending upon the latest hit that catch’s my eye. So I am core gamer – no question. My wife however over the last couple of years has drifted into the casual gamer sphere so well canvassed by Nintendo. It started with Brain Training and moved onto a bit of Wii Fit and a lot of Professor Layton – all games that have been squarely aimed at this new market that Microsoft and Sony said they are following Nintendo into. The point – well, my wife isn’t playing any of those games anymore. I bought her an iPhone for Christmas as her old phone finally died, and since then she has found a whole new world of casual apps – she spends more time on Facebook as it is convenient on her phone but she has discovered a whole new world of games from developers like PopCap that are quick and cheap to download. And now she sits happily chilling out at the end of a busy day, iPhone in hand. All of which means she has hardly picked up her Nintedo DS and the Wii Fit has got fat!!!!

And for me, this is the most interesting dynamic. Casual gamers are by their nature casual – so they will also be non-committed and transient – they will quickly move onto the next big thing. And I reckon it might just be Apple who will take all these non-core gamers away from Nintendo (and Microsoft and Sony too). A big prediction I know but no-one will hear me when I say “I told you so” in a few years – so I can pretty much say what I like really!!!

If it does happen, where does that leave our industry? And the big three of MS/Sony & Nintendo. Well, interestingly, the core gamers are still going to be here – still wanting their annual fix of COD/FIFA and bi-annual fix of GTA etc – the market may not grow by the double digit points that some shareholders might crave but it will still be strong at its heart, more than treading water thats for sure. And interestingly, Microsoft and Sony are more likely to have something to offer these guys than Nintendo. I don’t see Project Natal type interfaces opening up the market for casual gamers as much as reinforcing things for core gamers, adding more ways to interact and making games richer and more involving experiences – for those who are already hooked.

If this scenario does play out, the biggest looser here could be Nintendo – who has less to fall back on. I have played and finished every Zelda and Mario game to date, but they don’t come along often enough to keep a company the size of Nintendo going – their current market is much more reliant on casual gamers. And if Apple can distract other users like they have my wife, well who knows?


WOW on a laptop

June 17, 2008

Its not an experiment per se but I am going to install and have a go at playing WOW on my laptop over the next couple of months.

World of Warcraft has been one of our best sellers at playtime over the last couple of years and a lot of the guys who work with us have been playing it religiously.

To date, I have resisted because I suspect I will get addicted and nothing else will matter. But Big Brother started last week and Nikki (my wife) will insist on watching it (and I find it quite funny) so the next three months are written off.

So I had a brainwave – install WOW on my laptop, watch BB with Nikki and get some gaming done at the same time. I tried WOW once before last year but wasnt that impressed as it didnt seem that involving to start with. But that struck me as ideal if I am sat on the sofa with one eye on BB for the next few months.

So, this is the experiment – can I watch BB and level up and WOW at the same time without falling asleep or getting bored. I suspect yes but will keep you posted….