Interviews// GAME and the State of Retail

SPOnG: Steam, Xbox Marketplace, Wii Shop, PSN... they have massive footholds in the digital space. How do you see GAME competing with those services? Steam in particular, as that seems least attached to a particular brand or console?

Simon Soffe: Well, with all those things, you’re not necessarily competing because our job as a retailer is to introduce customers to product. So we can offer to help Microsoft, for example, sell more of its online and digital content... and in return we share some of the margins of that.

So for Xbox Live Arcade, PSN, and some of the stuff that has Steam technology in it, we’re selling it and introducing it to customers. That’s what we do. We don’t make stuff, we just sell it.

And the reason we are good at that, and why customers like us doing that, is because we’ve got it all in one place. We’ve got a huge range, and we can talk to them if they’ve got questions about what games we think would suit them best. We can tell them what’s coming up, and also give great value because they can trade stuff in.

I think we have a very real place in the market with all those products, helping other people to sell their products to consumers who, as we know, are looking for fantastic content.


SPOnG: So perhaps instead of say, offering digital download versions of PC games to compete directly with Steam, your approach is more along the lines of offering digital wallet items for those services?

Simon Soffe: To be specific with Steam, we don’t have quite the same relationship as we do with Microsoft. With Microsoft the deal is that people come into our stores buying Xbox LIVE points, either as a unit or as a dedicated XBLA game card, like Limbo.

The advantage there is that you’re putting Limbo on 500+ shelves in front of consumers who are actively looking for games. You’re also letting customers pay for these games in cash. What we’re seeing is that a large number of customers - incremental to the ones that are shopping online - are coming to our stores to spend cash, use reward points or use trade-in titles to buy new digital games.


SPOnG: Are you looking to go up against Steam at some point, at least in terms of your online digital offerings?

Simon Soffe: We have a digital download service on our website for PC... But at the moment, the big focus for digital is our place in the console arena. So it’s helping Microsoft, helping Sony sell their digital content and introduce new customers to their digital businesses. That’s what we’re really paying attention to right now, just console.


SPOnG: What about the actual brick and mortar retail landscape? Things are changing rapidly there too - HMV is said to be considering a downsize of its gaming focus... but there’s still an increasing threat from supermarkets, isn’t there? How do you plan to combat the aggressive price-matching of Tesco and Asda?

Simon Soffe: Exactly the same way we’ve been doing for the last few years, which comes back to the specialist model that we have. Customers can actually beat the supermarket prices if they bring their old games back to our shops to trade them in.

We see that a lot in the run-up to Christmas - whereas other retailers might be selling games at prices which are making them a loss, we can sell the games at prices which allows customers to negate a lot of the cost with trade-in prices.


SPOnG: I wanted to get your thoughts on Online Passes that publishers have started introducing to combat pre-owned sales. Where does GAME stand on that?

Simon Soffe: Well, pre-owned is really important to us, it’s really important to our customers too. Like I said, that’s their way of saving money. So I think the Online Pass initiative is an interesting manoeuvre by publishers. It doesn’t seem to have affected our pre-owned revenues at all, so if that was the objective then it doesn’t look like it’s succeeded.


SPOnG: There have been reports that retailers have allegedly put forward an offer to publishers to give them a cut of second-hand profits in exchange for the removal of those Online Passes. Can you say that’s something that GAME is looking to propose?

Simon Soffe: It’s certainly not a move that I recognise GAME making. We’ve always been very clear with our publisher partners, who we’ve been doing business with for many years. We see that customers like pre-owned, it helps drive the sale of new games. So actually, we all benefit from pre-owned.

And if you look at economies in general, you’ll see that a good second-hand market is a sign of a very healthy new market. If people want your new products then it means that second-hand values are strong too. We see that it is a benefit to everyone in the industry, and we will continue to say that.


SPOnG: As you say, publishers don’t seem to have much of an issue with pre-owned, at least anymore... equally, GAME doesn’t seem bothered much by Online Passes. But is there a risk of confusing the consumer at the end of the day? Stickers on boxes about DLC availability doesn’t always cut it, surely?

Simon Soffe: It’s a good point, and yes it has the risk of confusing people. Retail has got to be all about simplicity, and if there is any chance that consumers are going to be confused or having to ask questions, you need people that can give advice.

Our people are all very well trained, and versed on the titles they are selling and whether they are mint or pre-owned, and what they would deliver for the customer, and whether the customer has to buy anything else for that.

So we can offer the advice, but our overall objective remains to keep things as simple as possible for customers. So I think the industry will get to the right solution - obviously people are always trying new things all the time, that’s what evolution does - our job is to make sure that everything on sale is as simple as possible and in the event they can’t understand it that we offer a simple explanation whenever they want to ask for one.


SPOnG: 2012 has a pretty packed release schedule. Do you plan to extend the midnight launch events to games released in the Spring?

Simon Soffe: It depends entirely on customer appetite, and what games are coming out, but we absolutely love doing them. They’re really brilliant events, and we know that customers love them, so when there are titles that are fantastic and need a midnight opening, then we’re right there. It’s quite clear that people want to be able to play games as fast as possible. And when the titles come, then we’ll be there with the events.


SPOnG: How about hardware then, because that’s something that you’re looking forward to the most? What are you Vita plans?

Simon Soffe: We have plans... we will announce them shortly. I’m not going to run through them with you at the moment, but you know that hardware launches for us are massive news, and you will get the full GAME experience with the launch of PS Vita. We’re very excited about it, we know customers are very excited about it.


SPOnG: Thank you very much for your time.

Simon Soffe: Thank you very much.