Q&A: IEMA pres Hal Halpin opens Exec Summit in SoCal
Retailers, publishers meet under the balmy skies of Orange County. Halpin addresses the challenges and rewards that lie ahead.
HUNTINGTON BEACH, Calif.--The Interactive Entertainment Merchants Association Executive Summit kicked off a five-day run in Southern California yesterday. The event, one that brings retailers and publishers together in an atmosphere far less frenzied than E3, presents an opportunity to fine-tune business deals that impact what games appear, and in what quantities they appear, on shelves in the coming months.
As he did last year, IEMA president Hal Halpin answered the current set of burning questions facing his members...and all retailers that sell games.
We spoke with Halpin just days before the summit began.
GameSpot: Over the past year, in what significant ways has the environment changed for sellers of games?
Hal Halpin: In the past year, we've witnessed the introduction of two new handheld systems and the preparation for the next generation of console hardware. Shelf space is at an absolute premium--now more than ever--and the issues that accompany each new product line create altogether new challenges regarding merchandising. We're also facing an onslaught of legislation that threatens our ability to sell games in the same ways and manners that we, as an industry, have done for the past few decades.
GS: As the industry charges forward, toward the introduction of new hardware, there is mostly optimism. What does the industry need to do, to heed, in order for the transition to the new consoles to be implemented smoothly and with the greatest likelihood of success?
HH: Transition years aren't what they used to be. Looking back just one or two generations, one would see a very cyclical business and an optimization of technology toward the peak, with a sudden dearth of product diversity and availability in the fifth year. This time around, we, as an industry, have matured and understand the business better--how to work together to overcome old obstacles and create new opportunities. The cautionary tale would likely be to be less cautious than in years past, and trust in your business. Companies on all three sectors (development, publishing, and retail) all know their ebbs and flows better and can manage those efficiencies more appropriately.
GS: What would you recommend Microsoft do when it comes to supporting the Xbox, post-360 launch? For the sake of the retailers, is there a win-win strategy?
HH: I'm personally in the camp of folks that believes that Microsoft is regularly underestimated by their competition, and it's usually to their detriment. This is a company which learns from its missteps, invests in talent, and works well with partners. I have been impressed with their marketing strategy to date. Taking on the mass market, early out of the gates, while keeping true to the early adapters is a difficult balance. But if executed well, [it] could yield them a strong first-mover advantage.
GS: Does the IEMA have a position on next-gen software pricing?
HH: We can't legally have an opinion on the matter, as an organization, due to antitrust concerns. So we steer clear of having any conversation about the subject. Personally, I've felt that a price increase was overdue--not that I would hope for one--but we haven't seen wholesale and retail prices increase in quite some time. Compared to the music or movie businesses, which have steadily increased their ticket/admission costs to scale with escalating development and marketing, we're past due. Pricing is perhaps one of the most complex intra-industry matters that we can discuss. Consumers would always prefer the lowest possible expense, but I believe they're mature and savvy enough to appreciate that a $50 Mario game for the SNES is a vastly different product than the upcoming Revolution Mario game. We've also witnessed collector's editions on one end of the spectrum, and value packs on the other, that have both done exceedingly well in the very same retail environments. So it boils down to the value proposition...the same as any packaged, good product.
GS: Likewise: HD-DVD vs Blu-ray. Does the feud matter?
HH: The debate matters significantly to our members, but mostly because IEMA retailers, in addition to being the largest merchants of games, are also the largest market share leaders in DVD sell-through. Oftentimes, our executives on the games side are the very same folks responsible for DVD and UMD purchasing and merchandising. Carrying two inventories, as was done in the VHS and Betamax days, is a nightmare for the channel, and [it's] harrying for the consumer. It remains unclear what the debate's impact will have on the games side of things, as not enough has played out to date. We try to remain as informed as possible about the complexities of the debate but remain optimistic that a tenable solution may yet be worked out.
GS: Municipal and state legislatures appear more aggressive in their attempts to impose their own regulations on the game industry--specifically the retail environment. How are you reading the situation? Is it inevitable that cities and states will secure greater powers?
HH: We've seen a tremendous amount of proposed legislation over the past six months, all of it introduced immediately after the IEMA retailers concluded a voluntary yearlong revamping of their respective policies and procedures regarding carding for M-rated games. The industry is in a one-year window, where now new comprehensive research has been done to validate our efforts so politicians can point to two-year-old data that implicates us unfairly. My guess is that we'll see at least one [state], if not two states, have laws passed and signed. But as with the previous three attempts to regulate, their fate is a foregone conclusion. The laws are unnecessary, and they're unconstitutional, period.
GS: As the Executive Summit turns five, what are your goals with the event this year?
HH: The IEMA Executive Summit would actually be turning six this year if it weren't for the very first event being, unfortunately, timed during the launch of the Sega Saturn. The Summit was designed seven years ago by our board and staff as a way to reduce the number of sales trips publishers had to make over the summer to our member's respective offices. We wanted a venue where we could do an E3 follow-up, after seeing the product in May, and sit down to plan out the back half of the year and get business done. We wanted a format that was conducive to a fun and relaxed atmosphere in which to have meetings, [as well as provide an opportunity to] visit with each other and discuss topically important industry issues. And to that end, I believe the Summit followed through on all counts. This year should be no exception. As for the future, we've discussed changing up the format slightly and making some improvements to the structure, which we believe will enhance the experience and allow us to have an even more productive event.
GS: Thanks, Hal. Good luck.
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