GameStop in 2008: The Mega-Interview
September 19, 2008 Page 1 of 8
GameStop has consolidated the retail specialty game market in the U.S. -- having absorbed its strongest competitor, EB Games, in 2005. The company has also made major acquisitions and expansions in other countries, with recent moves in New Zealand and Scandinavia indicative of its plans to become the primary gaming retail chain the world over. The chain currently has more than 5,000 stores globally, and is expanding at the rate of 300 a year -- in the U.S. alone.
We have a tendency, as an industry, to concentrate on the games themselves. But the environment that surrounds them is equally as crucial as the games themselves, and that's why Gamasutra chose to attend the GameStop Expo, which took place last week in Las Vegas, Nevada.
The event -- read our full report here -- invites both the store managers of its North American stores and senior corporate management to the Mandalay Bay resort complex's convention center to experience product demonstrations, training, and meetings.
The event also gave Gamasutra the chance to speak with Bob McKenzie, senior vice president of merchandising, and Tony Bartel, executive vice president of merchandise and marketing.
The conversation was wide-ranging, and touched on many important areas of the business, from the expanding consumer base ushered in by the Wii and DS, to the health of the PC market, competition with digital distribution, the state of the current console market, the used game issue, and what differentiates the GameStop retail experience from its competitors.
To catch up on last year's interview with McKenzie, click here.
So, it's been a year since we spoke. How has the last year been for GameStop?
Bob McKenzie: It's been great. It's really been a fun year, and we've made a lot of progress, sold a lot of Wii hardware, since the last time we met. We've done a really good job of -- a year ago, when we met, we were just launching the brand 'GameStop: Power to the Players'.
We've done a great job with that, moving that along, and now we continue to refine our marketing and look at consumer research and figure out how we can market better to our customers -- and really figure out how we can get that expanded consumer in and really shopping with us.
Tony Bartel: If you look at the partnerships we've really been able to forge with the publishers, and with the Power to the Players message that Bob mentioned, I think you see in our advertising that what we're starting to do is really bring some exciting exclusive news to the gamers.
It's something that GameStop would love to stand for: that great experience, but a unique experience, that you can only get at GameStop. And we've really forged some great relationships with the publishers that have helped.
What do you see so
far that defines the unique GameStop experience?
TB: I think a couple of things: one thing that you saw with Madden, you saw that we came out with a $50 coupon book that went out with Madden. Some of those [other promotions] are about ready to launch, and I can't talk about those yet, but we're ready to release those very quickly.
With GTA IV, our commercials were one of the first times people were really able to see footage from the game, and it really took off on YouTube.
So again, what we understand from our consumers is that they want an exclusive experience; they want an experience they can't get anywhere else, so I think we've done a good job of moving in that direction this year.
The Big Story: The Expanded Consumer
Something you mentioned is that you've sold a lot of Wii hardware in the last year. Is that the big story for you in the last year, from the perspective of what you've sold?
BM: I think it's multiple platforms this year. In July, we had the announcement that came out of NPD that there's more Wii hardware -- a bigger install base now, than the 360. This obviously was big news, and points toward the continued growth that [Nintendo] continues to have. But obviously, the Xbox 360 platform has continued to grow very well for us, as well, and titles like GTA IV that finally are coming out on 360, that, and even on PS3. So really the whole market is really beginning to kind of rise for us.
With the PS3, the announcement early in the year with the Blu-ray, that they kind of won that de facto war, and GTA IV, which you got on PlayStation 3, and followed closely by Metal Gear Solid, those two titles really brought the PlayStation 3 hardware to a new level for us, and it isn't turning down.
TB: I think another thing that's changed for us is the explosion of the family gaming genre. I think at this time last year, people were kind of waiting to see if it was real. I think people now are firmly behind it, and they believe that it's real, and you've got developers -- and when we look at the numbers, the sheer number of games that are coming out in that genre, it's absolutely amazing.
BM: Yeah, that's a good point. I think last year I mentioned to you that we had put up dedicated merchandising sections in our stores, and to put that into an example of what Tony's talking about, currently in the kids' section, we have 215 active titles. A year ago we had 80 that were active.
We have 250 new releases yet to come, so we'll have over 450 titles that are going to be E and T-rated in this kids' entertainment section. We've done that merchandising and marketing-wise, with visual merchandising working with stores to, again, make our stores a little less intimidating for the expanded consumer, primarily the moms, and make that easier for them to come in and enjoy a good shopping experience. And again, our passionate players are able to provide a great customer experience for those customers as well.
Page 1 of 8