GAME’s Belong gaming arenas have “surpassed expectations” CEO Martyn Gibbs says
predicated Black Friday price cuts, or whether consumers awaiting Black Friday didn’t buy games they may have otherwise, just to find that they were discounted. It wasn’t just mint software that was hit, either. Ukie reported that pre-owned software sales over the year were also down 3.3 per cent - and Gibbs says that’s a result of poor mint sales. “[Pre-owned] was also challenged, because obviously the pipeline for pre-owned is predicated on a strong mint market. So if you have a softer mint market on key releases, it has a direct knock-on to pre-owned, though it would be unfair to say we’re disappointed with that preowned performance.” MARGIN CALL The failures in boxed software are all the stranger when we consider that the number of installed consoles are impressively high. “We’re still seeing the cycle [being] ahead of the last generation, if you add PS4 and Xbox One together, versus PS3 and Xbox 360 at the same time, we’re still seeing we’re distinctly ahead of that,” Gibbs tells us. However, that increasingly saturated hardware market means that prices are forced down and April 7th 2017
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the margins on PS4 and Xbox One were significantly reduced in 2017. Taking those lower margins out of the equation, GAME’s fall in GTV (Gross Transactional Value) over the year is reduced from 6.9 per cent to just 0.5 per cent. Despite that, hardware isn’t to blame here. A large base of installed devices should have sent software sales soaring to compensate for any drop in hardware profits.
how successful the headset will be in the long run. “It’s all going to depend on content, as much as availability of hardware, from our perspective the line-up of games is looking pretty strong, I think we just need to get consistency of supply,” Gibbs opines.
SUPPLY LINES In fact, the hardware issue was identified and is being mitigated in part by the release of midcycle consoles such as the PS4 Pro - and later this year, Project Scorpio. However, that effect was limited by stock issues with some of last year’s hot new devices. “The market was constrained on stock last year, PS4 Pro was very successful but there wasn’t the stock to satiate the appetite, so we’re just starting to see stock of some of the things we were constrained on over Christmas coming back into the market,” Gibbs explains. The same applies to Sony’s virtual reality headset: “We’re just starting to see stock come back through,” he says and agrees when we suggest that with limited stock to date, it’s hard to judge
We believe the UK market will remain positive in the first half of 2017. Martyn Gibbs, GAME
SWITCHING IT ROUND While some still have their doubts about the commercial viability of this first generation of VR headsets, the comparatively low-tech Switch has shot out the door - gliding on the tailcoats of The Legend of Zelda: Breath of the Wild. Gibbs has no doubt the console will continue to perform, saying the Switch “will be the biggest growth area in retail for 2017.” Though again, stock could be a limiting factor for its success, with Gibbs admitting, “If you tried to buy a Switch from me today, you wouldn’t be able to. “But the great thing from an industry perspective, is that whilst I’m a retailer and want to sell lots of things, I love being in a position where there are more consumers wanting to buy a product than there is product available. It really shows there’s a good appetite building for the Switch console.” www.mcvuk.com