Tesco : Games retail is Unsustainable

[PaTaito]

I've long thought that ?20 games would improve things. If games were cheaper I think...

....more people would buy NEW over preowned as the difference in price would have to be smaller to make a profit.

....people would buy more games. I can't afford ?40 games very often these days so I have to wait until they are under ?20 before I treat myself. If games released at ?20 I would buy more.

....trade in values would be lower which could lead to less trade ins.

....people would have more money to spend on DLC.

.....there would be far less price drops as retailers would have less of a margin to play around with. This could also result in more people buying NEW as there is less fear of paying ?40 for something that could be half that price within weeks.

Well when 2nd hand is dead, then this may happen anyway.

Then again another problem is the likes of COD/FIFA etc...they will never be reduced as people flock to them like flies around ****, a rather fitting analogy in the case of COD lately.

[dataDave]

I think games should be twice as expensive, require bigger budgets, take longer to develop/refine, offer free DLC later on down the line, and add on anything else that's good. Something like Blizzard's plan.

mr_socko's prediction would fist everything. 20 quid a game and we'd see hundreds of new studios pop up offering thousands of ****e games, and everything current would just end up even more throw-away than it already is. Save that for the Android/iOS store.

Even unplayed games still sealed sat on shelves are deemed throw-away, in my opinion. No real intention or desire to actually play the nonsense. Why bother even buying it?

Like mentioned on other threads. I think FIFA/CoD would benefit greatly from a subscription based service. Buy one disc, charge a fiver a month, and then everybody gets updated map packs/players, a great online experience with league ladders/replays/APIs and such, and the devs practically get kick-started for a future major update once you get the punters on board.

[Dazzyman]

Games market exploded from niche to popular when HMV started doing PC games for 30 instead of 50 pop in Indy stores years back, rest of chains reliased and started doing same. We shouldn't be paying more than 35 for titles what sell in there millions it ain't niche anymore. If the 2nd retail market dies there's no excuse to recouping there money. Look at Activison and EA too of the worst for higher cost per unit to traders and it's on stuff like Fifa and COD. Gaming has never been bigger, really do scoff at the doom merchants sales are way up for first quarter.

As for competing my local Indy is about 2 to 5 more than online, they don't sell stuff at 50 or 40!

[Family Fry]

Yeah but your local indie will be offsetting what lil money they make by selling Yu GI oh cards for 10quid or strat guides, they need to make money and pay wages somehow.
There was little in console hardware and software 10years ago when I was on the frontline, cube, Xbox and ps2 all fighting for space, alongside pc and gba. 10years later there is still the same ****ty margins for retail.
The retail side won't change from a consumer level it has to be done via distribution, development and publishers cause at the moment they all seem to be clashing.

[eastyy]

i may be wrong here but i remember reading that to develop for pc was a lot cheaper and a lot less hassle ...think with sony and microsoft developers have to jump through a lot of hoops before a game can be released (seem to recall microsoft had maximum amount of patches rule)

[Brad]

Developing for pc is free no licenses to pay anyone. As many patches as you want etc.

[Dazzyman]

Yeah but your local indie will be offsetting what lil money they make by selling Yu GI oh cards for 10quid or strat guides, they need to make money and pay wages somehow.
There was little in console hardware and software 10years ago when I was on the frontline, cube, Xbox and ps2 all fighting for space, alongside pc and gba. 10years later there is still the same ****ty margins for retail.
The retail side won't change from a consumer level it has to be done via distribution, development and publishers cause at the moment they all seem to be clashing.

Nope there stuff is same price for online for Warhammer, skylander etc... There's plenty of margin from wholesale value for majority of stuff to sell to the consumer. It's the odd title that isn't ie PES, Fifa and Cod but rest u can clear a good margin. They have the hardcore gamers buying which is all u need for a little shop like that. Love that place and all the staff are avid gamers. My wife went in last week for me and saw advert for Skylanders on screen. Nik popped it in for her and showed her how it played and she was gagging for it for her birthday today so kept it quiet and bought it. They reccomended EBG and Unit 13 to me on Vita and they know if I didn't like them I wouldn't be happy. No speal just proper staff what know there trade, way games retail for physical stores need to go back to. GS used to be like that till Blockbusters/EB group got there claws in. The gamer comes back to these shops. There sales have rocketed since Game got into trouble and they have peeps traveling up to 40 miles away. Tesco's could never give this and Game haven't for a long time. I can't believe gong into game last time not being able to buy PES practically forced to buy Fifa and being told Ico was old remake so reason they had no stock!

[spinpug666]

I was in Tesco yesterday and noticed that they had Turtle Beach wireless headphones for ?170. Not really a spontaneous purchase item now is it! If your gonna spend that amount of wedge on headphones im sure Tesco won't be your first port of call. Again a retail guy in a high up job hasn't got a clue.

[Team Andromeda]

Why is everyone having a pop at TESCO.

To me the notion of having a shop selling nothing but games filled with shelves and shelves of gaming products is outdated in this day and age , even the dictated gamer only buys a select number of games from a particular genre and that's not good enough for a retail shop only selling games imo - when you can have far better choice and cheaper games on-line

Money is tight and tastes change and in the days when it seems shops and developers need a game to shift 500,000 to a million copies to make a profit I think it means the end of the glory days of having dedicated gaming shops on the high street - where say even a Mega Drive game selling 100,000 copies was more than good enough for a developer to make a profit .

[Adrock]

I dont think thats the case at all Andromeda. Dedicated gaming shops can and will work still if they aim to stock a decent selection of back catalogue titles and offer good customer service.

As I said earlier, for big blockbuster titles the bigger chains like Tesco are always gonna offer the cheapest price by virtue of their spending power. That just means specialist shops need to focus on other areas of the industry.

Gaming is still very much going through the changes young industries do and will settle at a point where blockbusters aim for their audience and niche titles will aim for theirs. Dev costs need to be looked at for smaller titles but that is a business issue for the industry as a whole.

Still companies make a niche title with a massive budget and then are surprised by the lack of sales and losses incurred. The industry still needs to find its level for budget/sales/profit and all of that.

[Dazzyman]

Places like Tesco's only use games as loss leaders reason they store naff all. You only need 10 of a new game to sell well in a Indy to make a nice profit from the wholesale cost, it's very sustainable. It's just certain high street retailers got greedy and pushed 2nd for 5 less. My indy had KOA I'm for about 20 2nd hand for that it's a good punt. It's when stock been out a few weeks then prices tumble but your hardcore lot go still to the indy preorder for free and he gauges how many more to buy off that. After that if u want one they have it in next day and order it. For 2-5 more tops over online I like it and I like the staff cas they know there stuff. Much rather go back to the old personal touch. We only ever got in this mess when the big chains took over and killed them all, it's a good time to be delving into opening a games store, we saw a crash like this 22yrs ago and gaming was much smaller with big retailers muscling in, reason why GS saw the market and dug in. Lot of peeps still won't use the internet for buying games. The niche titles also don't sell cas the bloody big chains refuse to stock em.

[Family Fry]

10 new games? nice profit and Sustainable?

How much profit you actually think they make on new games? Staff costs, rates and buying stock needs to come out of the money coming in. If KOA cost them 10quid, they sell it for 20 and make 3 times more profit than selling it new. That's why retail loves pre owned, not nearly enough money to be made on new product sales.

[EvilBoris]

You only need 10 of a new game to sell well in a Indy to make a nice profit from the wholesale cost, it's very sustainable.

Next time you buy a game from Nik, ask him just how much margin he makes on a typical game.It's terrifyingly small, I would never consider opening a games shop because of it. That and the fact that the larger retailers are provided with products customers want that as an indie you are not given the option to purcahse.

Those 10 games aren't a nice profit by the time he's paid himself his wages, the rent, the electricity, the council tax, the phone lines, internet, the plastic bags that he puts the games in etc etc etc.

I had a catch up with him and he told me that things hadn't got any better since my manager chose to close our franchise, infact he showed me the cost price on the system for the game I was buying and literally, Nik would not of been able to buy himself a Boots meal deal with the profit.
Last time I went in there the PS3/360 games were priced at the full RRP of ?49.99/?54.99 because the cost prices were so high for them. When I worked for a chips franchise it was often cheaper to buy stock from a supermarket than buy direct from a distributor.

The only bit that they make a decent margin on with be accessories (someone mentioned ?170 turtlebeach headsets in Tescos, those cost about ?24 to buy) and preowned, which has far bigger margins than new.

The margins on games for everyone concerned are absolutely tiny and if you went on Dragon's Den for example with a fantastic product that had the same margin, they would laugh you out.
For example, some of the products in my business cost may cost 30p and be sold for ?60 or cost ?60 and be sold for ?700.
We get a pretty good deal as gamers, but I expect that to change as prices go up come next gen. We've already seen the start of it, handheld games priced at ?44.99 and that will carry on across to the next gen machiens I am sure.

[Stoppy2000]

Why do people care if the staff 'know their stuff'? I buy the games I want based on me knowing my own stuff. I want in and out with the minimum of hassle. Tesco is ideal. Nobody ever hassles me. I have no desire to make friends with people trying to sell me stuff.

[EvilBoris]

I'm the same, I don't need advice on which games to purchase or advice on what sized memory card to buy, so a shift to another store makes no difference to me. I genuinely will miss the convienience of some of the more gamer centric objects that GAME/Gamestation had available for impulse purchases, but no doubt other retailers will stock said items.