Tag Archives: Playstation

Jan 24 2022
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The Future of Video Game Retailers

Video game stores have for some years faced the dilemma of how to diversify their offering to stay afloat in a market evolving to become primarily a digital one. Since the launch of the “next generation of consoles” back in 2006, digital downloadable games have been available through the marketplaces of Microsoft, Sony & Nintendo on their respective consoles. However, initially, the list of games available to download was quite limited which benefited retailers as it would not take away business from them. 

Fast forward to 2013 and the next generation of consoles were released. The release of these new consoles brought a brand new, more reliable system in place to download full video games over the internet. The ability to download full games happened on the previous generation however, numerous factors attributed to its rather low popularity as it did not have the stability and the large selection of games as it does on the console’s successor. 

GAME’s game-changing new direction

The PS4 & Xbox One were game-changers in driving interest in digital games. This meant retailers had to diversify their offerings to provide more than just consoles and video games. For example, GAME is now selling Gaming PCs and a lot more accessories for all gaming platforms. On top of this, they provide access in-store to the Belong Arenas which are equipped with all of the latest consoles and gaming PCs with room for around 6 people to game. GAME is a prime example of a company successfully diversifying its business model to become a more experienced/service-based company. This is due to the nature of the video game market and its continuous push towards the all-digital era.

The new direction GAME is taking features a better value proposition. Martyn Gibbs, Chief Executive Officer recently described  BELONG, the Group’s esports and experience-based gaming proposition as “core to our transformation strategy and we continue to expand the business through the opening of larger BELONG gaming arenas while improving our GAME Retail offer to fully capitalise on the strong growth potential in the esports market.” (Waller-Davies, 2018)

This has proven to be successful in driving footfall to their stores with the gaming arenas as proven by the positive recent trading results.

COVID’s accelerating impact on digital transformation

Clearly, a huge impact on the video game retail industry as with all retail was the dramatic impact of COVID. Not solely due to the fact stores were closed, more so due to the change in lifestyle, most people had to adapt to. Logan Plant from IGN described COVID-19 as “not an instigator for the rise of digital media, but simply an accelerator of a trend we’ve seen take shape throughout the last console generation.” (Plant, 2021). Working from home became the norm for 1+ years and subsequently, a lot of businesses had to change how they operated to take advantage of the customers/consumers being stuck at home.

The impact of COVID was a record-breaking year for digital sales of video games. Sony also revealed that nearly 63 per cent of its “full game” sales for the 2020 calendar year came via digital downloads rather than games sold on discs at retail. 

As a result of COVID’s accelerating impact, it is important to reevaluate the current proposition and business direction of video games retailers. The current moves console developers are making into the all-digital era are having a dramatic impact on the performance of bricks and mortar retailers. A significant development happened in 2020 when the latest consoles were released (PS5 & Xbox Series X). These new consoles were released with a cheaper variant; a disk tray-free model with a cheaper price tag available from launch. This highlights the increasing dominance of the digital era and the ongoing decline of physical sales.

Owen Good from Polygon described it in stark terms: “The implication is clear: Video game fans, stuck at home, with the ability to make one-click purchases for entertainment to pass time, will do so in amounts up to the price of a full game.” (Good, 2020)

As an avid Gamer myself who has been a loyal customer of GAME since I could remember my weekends used to involve regular trips to pick up a new game or the latest console at the time. Interacting and talking with knowledgeable staff members was a huge part of the experience.

Embracing an experience-centric playbook

Despite knowledgeable in-store staff that can assist and support the customer journey, the gaming industry has changed to be a primarily digital one. However, despite this reality, there’s still a significant percentage of customers purchasing physical copies of video games. Yet the online giants such as Amazon have further eroded this market, offering next day delivery on the same selection of physical video games that high street retailers offer at a discounted price. 

The same situation is happening with Gamestop, in an article covering which companies would Amazon effect, it stated Gamestop “historically has made its money by serving as the middleman, but the game publishing industry’s move toward downloads and away from discs and cartridges is increasingly making the venue less of a destination for gamers.” (Brumley, 2019).

This of course reduces the need to pop into town and purchase a game. Additionally, on top of the physical video game competitors, each of the gaming platforms also have their own store integrated into the console where you can purchase digital copies of any game on that platform. Digital games usually have a higher RRP, however, they are usually heavily discounted during sales.

In conclusion, it’s clear to see that for retail stores to drive more footfall they need to reposition themselves and expand what they offer as a business. GAME have taken this in their stride and expanded their traditional offering of physical Video Games and Consoles to offer an immersive customer experience including VR, the opportunity to play video games with your friends in the Belong arenas, purchase fully built gaming PC’s along with the necessary accessories and gaming merchandise such as POP Vinyls or plushies. It has been proven that GAME’s new direction has driven footfall and has been profitable for them too. In order to win in the future and remain relevant, it’s time for video games retailers to embrace an ‘experience-centric’ playbook.

References

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Apr 03 2019
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Why Google’s launch of Stadia is a game-changer for the gaming industry

Stadia Blog

Google’s launch of Stadia is a game-changer, and a move that will have Nintendo, Microsoft and Sony quite concerned. No downloads, no patches and no console makes this the cloud gamers dream, and Google is delivering this incredible service without compromising on graphics quality. With 2.3bn active gamers globally and 46 per cent of those (1.1bn) spending, the financial impact to the establishment is significant. More so with the forecasted growth of gaming from $137.9bn (£105.3bn) in 2018 to more than $180.1bn by 2021.

Generational changes in consumers have seen Millennials identify with nostalgia, and they recapture their youth through console gaming, just as they have been doing for over 20 years. Back in 1994 PlayStation appeared on the market and having sold 525m consoles. It’s by far the most successful gaming platform ever.

Sony, together with Nintendo and Microsoft, has attempted to evolve the proposition and gaming to a digital platform with some degree of success. The most successful here is again PlayStation, with 80m active users on its PlayStation Network, up from 70m only a year ago.

However, PlayStation 4 Sony’s most up-to-date platform, is now six years old and accounts for a third of the total Sony turnover and profit. It’s no understatement to describe PlayStation as the jewel in Sony’s portfolio and that may just be about to be disrupted.

“A new generation platform”
Enter Google with its Stadia solution. As Phil Harrison VP and general manager at Google stated when launching Stadia: “It’s a new generation platform, rather than a next generation platform” which is what perhaps Sony, Microsoft and Nintendo have failed to achieve. Instead they’re merely evolving the concept of their platforms, rather than recreating them. Stadia will be a tough act to follow, with sharing options via YouTube, which has 63m daily viewers worldwide, Google Assistant built in, 4K resolution games at 60 frames per second with HDR (High Dynamic Range), and a plan to support 8K resolution in the future.

It may be game over for the business of selling hardware and encouraging gamers to ‘upgrade’ to a new console. This is not great for retailers who make a good margin on selling the hardware to eager gamers needing to upgrade to access the dream being sold by the platforms. For the platforms, success relies heavily on the hardware sales as the portal to the business end of the operation, the games themselves. Much like the print industry, brands sell the hardware at little or no margin to acquire users to the platform, tying them in to facilitate access to the gaming titles which deliver the true spoils and profit to the platforms.

Now with Stadia the internet is your store, with the network and data centre as your platform. So perhaps the paradigm is about to shift and the gaming industry will see a new emperor wear the clothes.

Generation Alpha

Consider Generation Alpha, the generation born after 2012, who as future consumers have been born into an era where minimalism in hardware drives digital innovation. This is the generation whom Stadia speaks to in volumes, and it may well turn out to be the only gaming platform this generation ever knows. Given that many 10 year olds become avid gamers, mobile phone, tablet and computer users, with no concept of physical media, this seismic shift could make the gaming establishment obsolete, unless their platforms evolve quickly.

To read the full article please visit Mobile Marketing.

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Dec 18 2014
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At 20 Years Old, PlayStation Continues to Capture the Market

playstation 20th banner

For those of you that can remember, or have grown up alongside it, you might be aware that PlayStation celebrated its 20th anniversary last week, and how it’s flown by. Gaming as a category has evolved decade on decade, and is forecast to continue growing. Yet some brands have died before they even started: remember Gizmondo and its flagship store with no stock on Regent Street?

Gaming, like no other category, must work hand in hand with 3rd parties to survive and innovate. While you could argue that TV needs content and cinemas need film, together the gaming industry innovates by collaborative choices. At the heart of this is the consumer.

Fads come and go as dictated by the users, just look at those Wii Balance Boards cluttering up garages and car boot sales. If it’s not generational, it doesn’t work. Above the age of 12, who wants to play games with Mum and Dad? Yet for how many years have you and your friends played Grand Theft Auto and Call of Duty, and above all honed your skills to better your peers?

Console manufacturers try to push some innovations. Look at Microsoft’s Kinect – while the innovation itself is impressive, the system is largely ignored by developers. With the release of the Xbox One, Microsoft tried to make Kinect an integral part of their console experience, but failed to engage users and developers alike. Motion tracking and voice control are yet more fads – what the gamers want is genuine innovation.

20 years in, creating a category is amazing in technology terms. VCR, Walkman and the like are all categories that have died and were replaced by more sophisticated technology which met consumer demands and changing lifestyles. Developers know this, console manufacturers are painfully aware of this, and when you’re products are reliant on one another, which innovation drives the other?

The Wii worked because it brought something entirely new to the scene and opened up a new generation to console gaming. This whirlwind success will not be replicated until manufacturers develop truly innovative ideas that revolutionise the console market.

VR could be the next revolutionary innovation that will take the console market by storm. It has the potential, but will it capture the imagination of consumers? As we can see from Nintendo’s falling profits in recent years, the gaming market is fickle and even whirlwind success will eventually die down.

Sky have just announced a number of Virtual Reality trials on up to fifteen shows in 2015. Perhaps a vested interest is at play here, but is VR where gaming and entertainment collide? We can already see evidence of games consoles developing into multimedia centres in the PS4 and Xbox One. Will VR be the next step in this development?

I suspect that in 20 years’ time PlayStation as a brand will still be going strong, perhaps as a console linked to a VR device. But at this point, who’ll be creating the content: gaming developers or actors and producers? With Remedy Entertainment’s upcoming title Quantum Break, which promises to blur the lines between television and gaming by allowing gamers to shape a personalised version of a linked television show. Could this represent the future of the entertainment industry?

 

Read more at: http://www.brandingmagazine.com/2014/12/16/at-20-years-old-playstation-continues-to-capture-the-market/

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Nov 29 2013
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Why Sony and Microsoft’s head to head may prove self-defeating

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Sony’s PS4 is going head to head with Microsoft’s Xbox OneSony’s PS4 is going head to head with Microsoft’s Xbox One

Wow, like buses you can wait for a considerable amount of time – seven years in the case of Sony – and all of a sudden two will arrive in tandem.

If you’re over 12 years old, you may be one of many people out there who has been waiting with baited breath for the arrival of PlayStation 4 and Microsoft Xbox One. Their arrivals are going to be filling up many fans’ time from now through to Christmas and new year. These are two huge brands killing Nintendo as the must have game platform.

Can these brands really attract a willing audience, especially with launches so close? And how do they benefit?

With brand loyalty at an all-time high, won’t those loyal to Sony or Microsoft continue to be loyal without the need for the media hype and PR frenzy, which for one will result in likely negative publicity and a potential drop in share price? Why wait seven years to go head to head with your biggest rival?

These brands invest so heavily in their equity. And in the case of gaming, they have on their hands a fickle audience where the right brand or platform is crucial for them to appeal to their peer groups. They’ve already transformed the functions of their consoles to do more than just provide an outlet for gaming.

With the console industry’s revenue falling, these brands have had to stretch their limbs to provide a kind of living room one-stop set-top box that offer all types of digital entertainment. These devices are now used to watch and control live television as well as streaming video from services such as Netflix and Hulu. No call for living on your sofa could be stronger than these incentives.

Launching deliberately so close together to create a battle may potentially be self-defeating and could have more far-reaching ramifications for the larger brand portfolio. After all, Sony, having just written down its profit forecast by 40 per cent, is taking a huge risk on one platform at the expense of the brand as a whole.

Social criticism is part of the nature of gaming, where violence, gender stereotyping, swearing and not forgetting the health inflicting aspects all have a cross to bear. Is it not time for these brands to consider the wider brand impact? Gaming is one of the most inventive, creative and technologically advanced industries within the developed world, and in the case of the UK, is a considerable contributor to the economy through forward thinking studios supplying Sony and Microsoft. Its social effect is vast and growing and once my generation fades into a distant memory, I imagine it will be hard to find anyone who doesn’t use a console to be socially active.

However, this all hinges on the brands’ survival and the luxury of choice Nintendo, Microsoft and Sony provide, which through self-imposed brand wars could disappear if the brand as whole dies. This could leave us with no choice but to head towards a future of dull conformists with only one platform to play on.

Dan Todaro is managing director of Gekko

read the full article at http://www.thedrum.com/opinion/2013/11/29/why-sony-and-microsofts-head-head-may-prove-self-defeating

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