Do you buy games from supermarkets ? [where you buy your groceries for example] I personally only support an actual gaming store, that’s just me. Nowadays you can even buy a Motorbike from a supermarket, but not for me thanks, I’ll go to my local Yamaha. It just seems wrong. Well HMV could turn the gaming retail business on it’s head from the look of things.
HMV UK and Ireland CEO and MD, Simon Fox revealed in a general interview with GamesIndustryBiz that specialist retailers could disappear if supermarkets don’t stop selling key titles at below-cost prices, which they obviously can as supermarkets can take the GP off a product quite easily. You see, they will use the said product as a calling card if you like, hoping you do the rest of your shopping there. They also do it just to turn stock, this is not possible if that item is your core product which is the case with specialist retailers. Fox also called for more support from publishers to prevent that from happening.
In 2009 the likes of ASDA and Tesco [well know UK franchise retailers] sold titles like FIFA 10 and Call of Duty: Modern Warfare 2 for as little as £25 [less than R300] as apposed to a normal price of around £40 [less than R500], obviously attracting large numbers of consumers to take advantage of the offers.
Fox said he thinks that particularly with “below-cost retailing” which supermarkets do with new releases, is extremely damaging for the industry.” Fox explained that “Firstly it creates massive price deflation, and customers think that if the absolute newest and best product is on sale at £25, why should I pay any more for a less high profile or older product? It immediately puts massive deflation on to the market.” And secondly, “what it will ultimately do – as it’s done in other sectors, such as off license – is destroy the High Street specialists. Because they can afford to sell below cost in certain categories, in order to kill of High Street competition, and then either they lose interest in the category altogether – which, I think in music you can probably see that the storm is somewhat passing. But the risk is that they come in, destroy prices and then they lose interest altogether.”
As much as I love a good bargain as a consumer, I must say I do see his point. I am curious to see how this plays out and if or when it could filter to local shores.