Gametech 2011: Improving current retail models

Who was there: Paul Yardley, managing director of GAME Australia; Ben de Vries, buyer at Big W; Matt Tibbles, research and insights manager at CBS Interactive.

What they talked about: Tibbles began by showing evidence that gamers are getting more savvy as they make important decision about the games they want to buy before they buy them (demonstrated with rising preorder numbers). Research presented by Tibbles also showed that AAA games continue to keep selling more and more each year. This means consumers have an increased perceived quality of games, which gives both retailers and publishers a chance to build customer loyalty.

From the perspective of Big W, De Vries believes the important thing is to work out what retailers should be giving consumers. From a buyer's perspective, the range of inventory has been "out of control" in the past few years, meaning not every game can win. According to De Vries, half the product range at Big W is turned over every year; thus, the store has to replenish around 300 titles at once. The problem is working out what to do with the stock that is left over; the industry cannot afford to deal with the amount of expense this creates. De Vries believes what is needed is a strategy to handle this issue. "Suppliers, buyers, and retailers need to focus on life cycles of games and managing inventory." Because video games are very expensive in Australia, no amount of strategy can entice consumers to buy; however, De Vries sees digital distribution as a direction in which retailers should think about moving. He also acknowledged the push into online was a big win for Big W.

Takeaway: The panelists provided a good idea of the current challenges facing the Australian game retail market and proposed a variety of alternative models and strategies that could work in the future.