GameStop in 2008: The Mega-Interview
September 19, 2008 Page 6 of 8
Extending the Lifespan of Games
Returning to trade-ins, something that I've seen -- I've attended a lot of conferences for developers, and there's a big push from within the industry to create features within games that extend the lifespan of the games, like downloadable content and multiplayer modes. Part of the motivation, quite explicitly, is to stop the games from being sold off quickly after the single player campaign is finished. Have you seen an impact?
BM: No, not really. At all. We are the number one retailer of Xbox Live, and most of that content up until now -- now that obviously you can get downloadable content or maps on PSN or through Nintendo -- but again, Live has been the format where it's been at. And, again, we've supported them as partners. We've merchandised Live very well within our stores, and again we've had many discussions about the content that they've had available.
You're talking about
BM: Not only point cards, but the service itself. The three-month and 12-month.
TB: By far we have a dominant share in the sale of actual network cards themselves.
BM: I would have to say that we originally, some of the early on expansion packs, if you will, it was a little bit of a, "Wow, is that going to impact us or not?" But again, as the publishers have educated us, as we've educated them on our trade and used model, they're using it more as an extension as a life of the game. These are just smaller expansion packs.
TB: I think Call of Duty 4 was a great example of where -- we had a game that was a huge hit, last year, obviously. They did exactly what you said -- they developed more maps for it.
BM: Game of the Year Edition.
TB: They made it available at retail and it had a resurgence in retail that I'm sure far exceeded -- I don't have the facts on this -- I'm sure far exceeded the revenue that they got from downloads. Because now you had new news for your game. I, frankly, am thrilled, that the developers are looking at this. Because anything we can do to make a game better for the customer is ultimately going to help all of us. There's no doubt about it.
This is sort of a rule of thumb -- I don't know how statistically accurate it is, but it's broadly stated that most games have about a six week shelf life from hitting the shelf till sales death, which is a very short window.
BM: I don't think it's that short. I think it's quite a bit longer than that. I think it depends on the genre. Now, sports titles, they probably have the shortest life of most games within their sales cycle, but again we've done a good job internally of marketing and really becoming aware, with our publisher partners, to make sure that we're not just focused on new releases and moving from one hot title to the next hot title, and really focusing on what you mentioned earlier -- the Greatest Hits category. We represent that through merchandising, visually, in our stores, to create that as a category, so again, there are some great games in there that have a lot of good gameplay.
The cycle, the one thing I would agree with, is that the full retail value of a title on the shelf has definitely shortened from years gone past. But again, the overall cycle, definitely not.
Some games, I guess, they kind of come and they go. Some games obviously have a much longer lifespan. What do you see as a way to extend the lives of games in general?
BM: Obviously again, I think it's important, the publisher holds the main card on that. Because, again, they're in control and obviously they have reserves, that's part of their business model. They know they're going to hit certain sales cycles and they're going to have to move from a $59 to a $49 or a $59 to a $39.
Again, Microsoft's done a great job of really grasping the concept of, don't do it and... make it a $10 move, make it a substantial move. When they move a price, they move it from $59 to $39.
TB: Make news out of it.
BM: And that's a significant jump in the sell-through of that title at that particular time in the sales cycle, and they figured that out several years ago, really.
TB: And the other thing is that there's a direct correlation between the quality of the game and the length of the cycle. And so as they come out with quality games, I mean, the quality games -- Call of Duty 4 has a resurgence.
Six months after it launched, we had a major resurgence. They come and they bring a little bit of news to it. It's still selling extremely strongly. I think the quality of the game has a lot to do with it.
The GameStop Experience
talked about as one of your core differentiators -- and this has come up a lot
of times -- is the experience you can get at GameStop against any other
retailer of games. What does that hinge on, in your view?
TB: Clearly it hinges on the knowledge of our people. That's first and foremost. You and I were talking before. You're a passionate gamer. You could have great conversation with any of the 5,000 people that are out here about their passion for gaming. They share a passion for gaming that is unmatched in the industry, and that's why they're there at GameStop.
Another thing I think we bring is selection, in our stores. No one else, and I mean no one else, has the selection that we have. And also we are dedicated to having products quicker than anyone else, or as quick as anyone else, so you're able to get that product that you want, with somebody who's in most cases has actually played it and can tell you some things about it, and will in some cases give you an opportunity to select other games.
Another thing that I think we do very well, especially with the new gamer coming in, with the expanded audience, one thing that I saw a lot during the Holiday season as I was out on Black Friday -- you'd see somebody find a Wii, and they were so happy to find a Wii and then they'd be walking out the door, and you'd say, "You realize, you only have one controller there. In order for it to be a really great present, you're going to need two, three, or four." It's the time that we get to spend and interact with the customer that really differentiates our experience from anyone else.
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