Blockbuster's UK commercial director Gerry Butler,
taking some time out from being a time-travelling husband and kicking Immortals off cliffs, has slammed the industry practice of blaming pre-owned games for a market in decline, saying that without pre-owned, specialist retailers cannot survive against multi-functional outlets such as supermarkets.
“If you’re a specialist you need certain margins to run your business,” he said. “When you are in a commoditised industry, those margins evaporate.
"And supermarkets use games as potential loss-leaders, so specialists can’t survive. That’s why there are less games shops than there were three years ago. Without pre-owned, those companies cannot survive."
He also noted that he didn't see anyone complaining about pre-owned games when the market was in growth, something we ourselves have noted a number of times, the implication being that pre-owned has become a convenient scapegoat for falling sales.
“When the market was growing, nobody spoke about trade-in. It didn’t matter. Everyone was hitting their numbers. But as soon as someone starts missing the numbers, they are like: ‘Well this trade-in is killing us. How do we stop it?’”
Butler went on to suggest that this industry's whole approach to distribution is broken at the moment, citing high premiums and uncertain stock figures as stumbling blocks.
“I think the distribution strategy employed by the publishing world is broken and needs to be fixed,” he added.
“It is the whole way the industry is structured. Just think about consumer brands like Coca-Cola and how they are built. You create huge pre-awareness and then make sure you have full availability in the marketplace.
“In video games, the publisher has to pay substantial royalty payments to the platform holder upfront, which makes the cost of games high. Then they go to the retailer, and the retailer has to guess the number of units it is likely to sell. Then the marketing begins, and it might turn out we don’t have any stock left.
“It’s not a good situation if the TV ads are running and you’ve no stock.
“Let’s come up with a model that is fair and equitable and long-term and sustainable. This current model is not long-term and sustainable.”
We rather think that the digital elephant in the room is likely to play a large part too, though that rather depends on who takes the plunge first. You can check out our big discussion on Ye lde Used Games Debate over on Episode 8 of the PWNCAST. [MCV]