Dreary Outlook For Video Game Holiday Sales?
Author: AF Duncan
November 20th, 2007
In part perhaps thanks to all the blockbuster games of the year getting released before Thanksgiving, the only video game chain left, GameStop, revealed a poor profit outlook for the 2007 holiday season yesterday, which sent its stock tumbling.
I have to admit, I thought the industry was in pretty good shape…although the interest from adults in video games seems to be waning somewhat. Is there interest in any console but the Wii? Maybe that’s the real question?
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3 Responses to “Dreary Outlook For Video Game Holiday Sales?”
November 20th, 2007 at 2:05 pm
There’s a range of problems:
First, title saturation. There’s a ton of new titles coming out, most at the $60+ price point. Rock Band runs $170, and they aren’t releasing the instruments separately, but that’s another issue. Second, as mentioned above, only two of the consoles are doing great numbers to begin with, the Wii and the 360. However, the Wii doesn’t have many titles, and the 360 has too many. Third, with a few exceptions, the game makers are running/have run out of ideas. The last big innovations (outside of the Wii) were GTA sandbox play and the rise of the rhythm games. The latter is still riding high, but the former, while still popular, is also the easiest to screw up, and chews up tons of resources, so devs are very careful about making them. That leaves a ton of poor to mediocre shooters, with a few good ones scattered in, some platformers, the ever-present sports game, and more niche titles like RPGs to round things out.
Mind you, all of this has been coming for the last couple of years. People have been bitching for a while that there’s a lot of games coming out, but not very many good ones. However, for the first time in probably a decade, the number of games I’ll be buying this season has declined, sharply, and I know a bunch of people that can say the same. In fact, that’s been true for this entire year.
On top of that, yeah, GameStop is the only dedicated games retailer left of any note, but they’ve gone off into greed-land by making resale of games their primary market, with the selling of new games the way they get people into the stores. It’s a sales strategy that is essentially one step removed from a Ponzi scheme: it only works as long as gamers sell them games cheaply, then turn around and spend money to buy new and used games back. Sure, used CD stores have managed it for some time now, but Jimi Hendrix still sounds as good today as he did 30 years ago, whereas a videogame from 5 years ago won’t sell for more than a couple of bucks now. The whole system is going to crash one of these days, and I hope we don’t end up with another Atari-level crash.
November 20th, 2007 at 3:37 pm
Wow, this is actually really insightful. Thanks!
November 21st, 2007 at 4:53 am
I agree with BitterCupOJoe. My experience with gamestop/EBGames is almost always a negative. I go there for used games sometimes and thats about it. Another reason they have issues is the following. I called at least three Gamestops regarding getting a midnight release copy of the WoW expansion a while back. They all had the exact same reply:
“Sorry, we only sell to the midnight crowd to people that have pre-ordered. We cannot help you.”
This made me so very angry. I decided to call the Wal-Mart right across the street and ask if they had copies for sale. They said:
“Come on down and join the line we have plenty.”
Thats the difference. Wal-Mart is not even an expert in games and knows how many they can order and sell. Gamestop, the “expert”, can only do so by getting the money first from Pre-orders. They do not even undestand the game market!
I actually went over to the Gamestop and showed them the Walmart purchase afterwards to make sure they understood how badly they run their business. There were at least 50 people in line with me in Wal-Mart too. Most of which I am sure called Gamestop.
Ok, rant over, but you cannot run a business like that.