Disappointing Christmas Return To Blame
After an 8.2% drop in sales during the five-week Christmas period compared to last year, UK retail chain HMV is looking in to a possible scaling back in their videogame sales department in an effort to rescue the company's slipping profits. The popular retailer revealed the drop in sales was not reflected across their market share in CDs or DVDs, as the share in the videogames market fell 16% across the UK.
"I think one of the things we will do is look at what percent of games should make up as part of the mix," chief executive Simon Fox revealed, reported by The Telegraph. As it stands, videogames comprise 20% of HMV's overall sales, but Fox muses that the company might instead look to only sell the biggest and best games capable of positive sales figures, rather than the "long tail of older software".
It's worrying news, especially when the rest of HMV's departments continue to show growth. Their decision to stock more and more technology items such as headphones and tablet computers has helped to compensate for the decline in videogame, music and DVD sales. If the numbers continue to drop, however, in those particular departments, expect a radical shift in your local HMV's videogames aisle.
It'll be interesting to see how the rest of the retail industry would respond if HMV did decide to simply stock only the biggest AAA games and ditch the rest of the market entirely. I almost feel that, if they were to do this, it would simply propel the digital market forward at a far greater pace, forcing publishers to adopt a more online-centric strategy to compensate for the potential loss in sales. [The Telegraph]