Is it Game over for a certain high-street retailer?

September 28, 2011

The Retail Inspector – High-Street-2

Game Group, the country’s biggest specialist retailer of video games, suggests that the gaming industry could go the same was as the music and film business: terminal decline.

The period between early February and the end of July saw a decline in the sales of video games hardware – the physical consoles – by 13.7pc, with software sales also down 16.5pc when compared with last years figures. However, Game itself did slightly better with sales only dropping 9.9pc.

The decline in sales obviously due to the lack of interest and excitable releases, earlier this year we had the Nintendo 3DS, which, like most 3D releases, hasn’t quite cultivated the entertainment industry.

IHS Screen Digest estimated that last year digital games totalled £411m, up 23pc, compared with the 17pc deterioration of physical sales to £1.53bn.

Where Game Group and the like will be interested is in the growth of digital gaming, by offering customers the opportunity to download games from their online sites.

The downfall is that when downloading online, gamers will simply look for the cheapest price, there isn’t the same loyalty, as you’ll find with gamers who prefer a high-street shop.

The introduction of the “app store” has revolutionised gaming, with gamers able to download a quirky game on the go and at a low cost. Examples include Angry Birds and Doodle Jump, which are renowned worldwide, and at around £1 they aren’t exactly bank breaking to purchase.

Whilst Game Group’s digital revenue only accounts to around 5pc of the group’s turnover, it does suggest that they are dominating the physical market, but are in danger of being left behind.

This doesn’t spell the end for gaming; in fact, gaming is one of the biggest growing forms of media and entertainment and will no doubt be here for the long run.

The gaming industry makes more than the cinema and DVD industry combined, so there is no worry that it will continue to sell, but the question is whether the high-street retailer can progress with the industry.

With rent, rates and staff wages to pay, can the high-street retailer really make a profitable income, or will they become the latest victim to the digital revolutions ‘survival of the fittest’ policy?


In other news…

Maltesers, the country’s third biggest chocolate brand are to become a Fairtrade product, in a move which will boost sales of the ethical brand by 10pc.

Maltesers become the first Mars product to shift to Fairtrade. Following similar moves from rivals Nestle, whose KitKat is now Fairtrade.

The deal could see a slight increase in the price of a bag of Maltesers but the increase in value will be no doubt worthwhile as the farmers who work day and night to bring us such treats will be rewarded much more fairly for their labour.