Q&A: EB's Jeff Griffiths

In all the spectacle and hype, it sometimes gets lost that E3 is as much a show for retailers as it is for the press. Sprinkled in the crowds made full with fan site editors and daily news reporters are thousands of retailers curious about the games that are due to market in the coming months. Jeff Griffiths, CEO and president of Electronics Boutique, while a tad high on the corporate food chain, represents that community to perfection. Involved in the retail industry for almost 30 years (he started out as a buyer for a chain of discount stores in Philadelphia), he got hooked on videogames early. One of his first assignments? Evaluate Pong for the chain. Then, in 1984, he joined Electronics Boutique; rose through the ranks of its merchandising and distribution arms, and in 2001 made president and CEO rank. We caught up with Griffiths just days before the show’s opening bell and asked him to share some of the secrets behind the retailers' approach to E3. Hint: the retailers are the ones in suits.

GameSpot: How does EB approach E3. What’s the primary agenda for your executive team of buyers; what are their goals?

Jeff Griffiths: The primary agenda for the merchandise group is to see the product that’s going to be released in the back half of the year. And to a lesser extent, maybe products that’s going to be coming out next year. But they are primarily focused on what we’re going to see for the back half of the year, through the holiday season.

GS: And how does someone from that team read the show floor? What are they sensitive to?

JG: The product. The quality of it, the breadth of it, how far along they think it is, the level of support the publishers are giving to individual products. It basically is a barometer for how we think the back half of the year is going to be.

GS: How much of a factor are the massive booth presentations on the orders that your team decides to place? Does the hype have an impact?

JG: No, not really, because all the ordering is done at a later date. The hype is really more of an opportunity for the industry to display itself to the media.

GS: Your guys can see through that? They can connect with the product?

JG: Oh yes. We’ve been doing this for so many years. We could be in a room with a small video screen and see the product and get just as excited about it.

GS: Jeff, you’d better not tell the ESA that.

JG: But the event is important; it’s an important media event for the industry. But when you’re looking at what’s the role of a merchant who is going there, it’s really...immediately you have to try to look beyond all the hype. I think the first time you go to the show, or the first couple times you go to the show, it can be a bit overwhelming, but after you’ve been going for twenty or thirty years, you certainly have a purpose and agenda for why you’re going and you don’t really care who has the biggest booth or the loudest booth or the most video screens. I think that certainly plays a role, a meaningful role, for the industry.

GS: What is the effect on retailers, on your company, when a game is hugely promoted at E3 but then fails to ship?

JG: That is challenging for us. Our business plan is based upon a couple of different metrics. One is what we think the overall industry growth will be for the year, but then what level of contribution individual products will make towards that goal. If there’s a product that is prominently featured and all indications are that the product is going to ship in this year and it doesn’t, yes, it has a negative impact, definitely.

GS: Do you prepare contingencies for those big games that don’t make their ship date?.

JG: Well, as best you can, you look at the release schedule and you see if there are other products that perhaps can take up some of the slack.

GS: I’m kind of curious, Jeff, to what extent do the major industry players seek your counsel around E3?

JG: Actually, my personal role at this show [gives me] an opportunity to spend time with my counterparts at the hardware manufacturers and the software publishers to discuss our outlook on the business--and what we see for the balance of the year from a retail standpoint. I think they view that as valuable input.

GS: And what do you think about the value of the event? Has it remained constant, or have some years been more significant than others?

JG: To me, every year is equally as important. I think that some people will view a year with a big product launch as being more important than a year with no product launch. For instance in 2001, as we were preparing for the launch of Xbox and GameCube, there was probably a lot more hype around that.

GS: And personally?

JG: You’ll hear comments from people, “there was really nothing new at the show this year,” or, “there was no big deal.” To me, of course it’s a big deal, because it’s a $10 billion industry, and we still have to do about $8 billion of it between now and the end of the year. What we see at the show is what’s going to drive that business. So every year is important.

GS: And are there any particular games or companies or products that you’re particularly interested in seeing this year?

JG: Well, this is a big software year, so there are some titles that are going to be huge drivers for the business, like Halo 2 and Grand Theft Auto: San Andreas. EA certainly has a very strong lineup this year. We’ll be looking closely at all that with the hope that they meet expectations and they meet their ship dates.

GS: What are the big questions you’ll be looking for answers to?

JG: Hmmm. What are the strategies of the hardware manufacturers to drive business this year? Will there be a price cut on PS2, or will there be a variety of bundles to help drive business? Where are we with PSP? Is that product going to be ready to ship in the spring, and does it look like it can be an impact product for next year and a few years after that? There’s a lot going on.

GS: In what ways does the expansion of the industry--it’s collaboration with the movie industry, the alliances being made with music companies and other broader entertainment brands--impact EB and its business model?

JG: The most effective way for us to manage that is to broaden our store base.

GS: More stores?

JG: Right. Because for the first twenty or so years of our life—closer to twenty-five years of our life as a company—we were basically a mall-based retailer. But we’ve been on an aggressive strip store expansion plan, and aggressive international expansion plan, so we’ve really broadened our store footprint to reach out to a much larger demographic; which, from a timing standpoint, was a good decision, based on what you said about the industry expanding beyond video games and reaching out to a broader customer base. That’s really the way we’ve addressed that.

GS: What do you think the main influences are that affect today’s game buyer? And in some ways I would ask you to reflect on your perspective, because you’ve been in the industry, in retail, for some many years and you’ve seen consumer taste change and the games that are being offered change. What are the most persuasive ways to reward the core consumer and also broaden the consumer base? How do you work both sides of the aisle?

JG: In a couple ways. You enhance the shopping experience and you bring value to it. Although the demographics of gamers has shifted and it’s certainly moved beyond a fad--it’s moved beyond a niche consumer base to a broad base lifestyle. As that base has expanded, there’s probably somewhat of a lessening of product knowledge among the consumer base. So I think that for a retailer who provides a high level of service, certainly there’s an advantage there. And with technology rapidly changing, product lifecycles continually shortening, and multiple platforms to become familiar with, we can certainly help the consumer make better-informed buying decisions.

The other piece of it is the value in being able to efficiently distribute product to stores in a relatively short period of time so that new releases are readily available in thousands of locations within twenty-four hours after their launch. And giving consumers the choice that they can save money by buying a pre-played version of the game or trading in a previously played version and getting a discount on the new game. The whole opportunity with pre-played [titles] has made games more affordable for a broader base of consumers, and at the same time we believe that it’s helped maintain the $49 price point on the AAA Games--again because it’s made it more affordable.

GS: Will you get a chance to walk the show floor?

JG: Most of my time walking the floor is when I’m moving from one appointment to the next, as opposed to just casually strolling up and down the aisles. Hopefully by the end of two long days, I will have seen most of what’s on the floor. Other people from the company will be focusing on looking in depth at products and will give me feedback on what they see.

GS: Do you enjoy going to Los Angeles for the event?

JG: Absolutely. I love the industry. I love what I do. I love the excitement that it generates. Every year I look forward to seeing new products and the progress that we’ve made in terms of the improvements in graphics and gameplay and sound, and the quality of the games. It never ceases to amaze me how much better we get at it every year. And yeah, I think it’s a great opportunity to see where we are as an industry, to share the EB story with our major partners and feel like you’re really part of something. It’s just a really exciting part of our lifestyle.

GS: Thanks Jeff.