Back in February, I wrote a retail review for Game Play USA, located in Springfield, MA. The store featured cheaper new releases, gameplay stations to test or play games on, a wide range of new and retro games, and a great atmosphere for fans of video games. I loved it there and was happy to see that the store had been able to hold its own against GameStop to establish its own core of visitors. I’d heard rumblings that a second location may open at some point, and was told to keep an ear out.
The rumblings were true, as a new Game Play USA location opened today in Westfield, MA. I took a trip down to check it out, as it’s closer to my house than the Springfield location is. I walked into a store that smelled like new, but had a comfortable familiarity that made me feel right at home. New games, older games, displays, gameplay stations, and friendly staff all made for another positive experience. The staff worked hard in the days leading up to the new opening to move inventory, stock shelves, post signs, and make the store accessible for consumers and be ready to go for the grand opening this week.
As with the Springfield location, shopping at Game Play USA has a few advantages versus other stores or chains. The first– and perhaps most notable– advantage is that Game Play USA sells new releases for $54.99, instead of the $59.99 MSRP that consumers see at other retail stores. While a $5 difference may not seem like much, it’s still $5 more in your pocket. In addition, trade-in values are very competitive at Game Play USA and can make new games even more affordable. Trade-ins for all platforms are accepted, too, so older games and systems that may be unwanted or no longer played can find a good home and earn some store credit (or even cash) that might come in handy.
This Game Play USA location also features eight gameplay stations that can play PlayStation 3 and Xbox 360 games. For $7.50 an hour– or $4 for 3o minutes– customers can try out a game to see if it’s worth a purchase or to spend a little leisure time in comfortable gaming chairs in a friendly setting. While it may be cheaper to rent a game from Redbox or GameFly, it’s a nice service to have in-store if you’re unsure of a particular game’s quality. Word from store management is that customers with a membership card ($15 annually, 10% off preowned games, 10% more on trade-ins) may be getting free rental time on a monthly basis, which is a nice perk.
The store’s initial inventory is solid and a stream of new and preowned games will be continuing to flow in as the holiday season approaches. All of the current-generation platforms are represented on the sales floor: Xbox 360, PlayStation 3, Wii, and 3DS games are all easy to find, organized to separate sections and (mostly) alphabetized. Games on older platforms will be increasingly available, but they are currently not represented on the floor… so be sure to ask one of the staff if you’re looking for games for a PlayStation, Game Boy Advance, NES, or any other retro console.
Pricing at the store is comparable to competition. I did notice a few games that were a bit higher than GameStop pricing, but there were others that were lower. It balances out, for the most part. As a collector, I liked that the PlayStation 2 games mostly have original cases (and many have instructions). The Gamecube and Xbox games were generally the same. I bought three games during my visit: Fist of the North Star: Ken’s Rage (PS3, $18), Battlestar Galactica (PS2, $6), and Chaos Legion (PS2, $5). All three games were complete, and only one of the three discs was in less than great condition. Best of all, the transaction was quick and there was no pressure or upselling. Even though there are membership cards and preorder options, interactions and transactions are customer-focused with quick answers to questions and genuine reactions by staff.
I was impressed by my first visit to the store, with great results even during opening day. If you’re in the Greater Springfield area, I recommend giving the store a look. The store is located in the Westgate Plaza just off of Route 20 in Westfield, MA. Operating hours are 10am-9pm Monday through Saturday and 11am-6pm on Sunday.
Below are a few shots I took inside the store during my visit:
Between SEGA Europe‘s painful restructuring and Activision‘s dismantling of Radical Entertainment, this week has been another one of those weeks that we’d rather forget. It’s always unfortunate when people lose their jobs, and downsizing doesn’t often instill confidence that the affected industry is moving in the right direction. These moves are a continuation of the state of correction that the video game industry is in– especially in the console sector. The market is shrinking, and not enough money is being made to keep moves like these from occurring.
I know that when I remark that events like these aren’t surprising or that the market is shrinking, many people react quickly and negatively to my observations. “Stop with the doom and gloom” or “Things aren’t as bad as you claim” are popular responses. I don’t make these observations to earn praise, and I know that very few gaming fans like hearing these things. I’m simply calling things as I see them, and there isn’t a whole lot of good news out there to talk about.
The console sector has had an amazing run, especially since the PlayStation era began. The consumer base had steadily grown before the Wii took the market by storm and sold tons. A lot of studios saw success and expanded before we saw the opposite begin to happen during this console generation. These runs of success don’t last forever, and consumers are finding other entertainment options. Consoles are no longer the undisputed gaming platforms. Consumers are splintering into other areas, like PC, mobile, and social methods of gaming. Most consumers who wanted consoles have them now, as it’s been 6-7 years since the current generation of consoles was introduced… and at least some of those consumers are moving on. Perhaps it’s partially because of stagnation due to an anomalously long console cycle. Maybe the economy forced a change in spending priorities as consumers got older. It’s possible that the time isn’t there anymore for some consumers to play video games like they once did.
The correction in the console market feels much more painful because it’s coming down off of a huge period of sales. Nearly 40 million Wii units have sold since November of 2006 in the United States alone. Another 55 million combined Xbox 360 and PlayStation 3 units have sold over the course of this console generation. That’s an awful lot of hardware. It was a boom period for the first half of the console generation before things began to recede… and now, we’re seeing sales decline to levels similar to 2004-05 when the previous generation was running out of steam. Perhaps we see a significant resurgence in sales when Gen4 really gets going sometime in the next 12-18 months, but there’s no guarantee.
I’m not going to come out and say that the console sector is dying. I know that might be your gut reaction to what you’re reading, but it’s not my point. I firmly believe that there is a solid nucleus of consumers in place to support Gen4 and that at least some profits are out there for the taking. I don’t expect console sales to fall off a cliff in Gen4, but I also think that it’s unreasonable to assume that another 100 million consoles will sell in the US when we tabulate Gen4 data in another 7 years. Unfortunately, since the bar is set so high, there’s going to be disappointment from investors and analysts when consoles don’t set records for another generation. There’s the possibility that investors pull back and, with the focus being on “AAAA blockbusters”, more studios and companies could face restructuring and/or closure over the next couple of years. A shrinking market– and declining sales– can’t support projections of 5 million units sold as a success. Not anymore.
I understand that many of you want to hold onto the idea that Gen4 hardware will reinvigorate the market and that trends will turn around. Several industry people that I have great respect for have cited this reasoning repeatedly. I believe that is a possibility and could very well happen; however, I personally am not convinced that the solution to ending this correction period is that simple. Many different variables come into play. How much will Gen4 hardware be? Will software prices rise again to offset expected rises in development costs? How will digital distribution expand? Will the economy find a foothold and begin to rise with confidence, or will a double-dip recession occur at the worst possible time for the console sector? As these puzzle pieces fall into place, I’ll feel more confident in my own outlook or may start shifting my line of thinking in a different direction.
For right now, based on the data and trends that are available, I see no reason to change my thought process. More studio closures are possible to likely in the next 12 months, and I expect YOY sales comparisons to remain moderately negative for the balance of 2012.
I just finished my analysis of April’s NPD sales data for Popzara Press. To go along with that piece, I have five observations that I’m going to expand upon for you here.
1. Gotta predict ‘em all!
As it turns out, I correctly predicted the ranking order for hardware sales in April: Xbox 360, PlayStation 3, 3DS, Wii, then Vita. I came within about 20,000 units of predicting the actual Xbox 360 sales number of 236,000. I overshot it– as I did with the other platforms– but feel pretty good about getting more right than wrong when it comes to predicting hardware. I’ve had a decent record doing this, but predictions are only part of what I’m doing.
2. No Portal Kombat means sliding sales.
Mortal Kombat and Portal 2 combined last April to move well over 1.5 million units. Compare the significance of those two games with Kinect Star Wars, and Prototype 2. You really can’t. Even adding The Witcher 2 to the mix, these games simply don’t have the same kind of selling power as last April’s slate of game releases. Without prominent and captivating game releases, consumers aren’t going to spend money on software… or hardware, for that matter. Perhaps May will bring a better result with two releases potentially coming close to or exceeding a million units sold.
3. What’s wrong with the 3DS?
The 3DS has been a huge hit in Japan in 2012, but here in the US, it’s languishing. Sales of the handheld here in April were less than 150,000 units, which is about half of what it sold in Nintendo’s home territory. Defenders of the platform continue to fall back on the DS comparison and how 3DS is outperforming it within the first year, but most of those sales were in Q4 2011. Lack of significant new software is one possible reason for the malaise, but other factors like consumer moves to iOS/Android need to be considered. Perhaps a spike will come this month with the release of Mario Tennis Open, but Nintendo is going to have to deliver more games for the 3DS and try to encourage more output from its third-party publishing partners. Without games, there’s no reason to spend the $170 on new hardware.
4. “PS Vita is gaining momentum”? No. No, it isn’t.
It’s already difficult enough for those who don’t have access to raw NPD data to have Sony continually refuse to share sales specifics publicly, but it’s worse when Sony’s Corporate Communications arm delivers NPD reaction that uses dozens of words to say nothing at all. The quote above is pulled from Dan Race, Senior Director of Corporate Communications for SCEA. Unfortunately for Mr. Race, leaked NPD data shows that if Vita is “gaining momentum”, it’s not pertaining to unit sales. Vita unit sales tanked in April, falling below 100,000 units after spending its first two NPD reporting periods over 200,000 units. At least in terms of retail sales, software is seemingly non-existent after the initial wave of launch titles. Yes, it’s early, but very few consumers who haven’t already bought a Vita are going to drop $250+ on a device that has very little going for it at this point. Even if E3 delivers promises of new Vita games– which should happen– there’s no reason to buy near-term. There isn’t a killer app out there right now, and until one becomes more than just a “Coming Soon” placeholder, sales of Vita hardware will continue to struggle. Even a speculated price drop may not do much without games to support it. Vita needs to be Sony’s focus at E3, without question.
5. Are we saturated yet?
The Xbox recorded negative YOY hardware sales results for a fifth straight month, so it’s been argued that the hardware is approaching a saturation point. I think that there’s some merit to this argument, given that we’re going to be entering its seventh year on the market and that 2011 sales of Xbox 360 hardware were very impressive. That 2011 success is also a bit of a monkey on Microsoft’s back, since comps are hard to achieve a year later. Is it realistic to expect Xbox 360 sales to remain steady or improve this late in the console cycle? I don’t really think it is. Having said that, I do believe that the negative sales trend will continue and that I’m seeing a parallel to what we saw with the Wii. Waiting too long to act when your current console’s sales begin to fall can be costly. Even with a recommended price drop, I don’t see sales reacting positively for very long. Even when Halo 4 hits in November, can we expect another 1.7 million Xbox 360 units to sell? I’ll answer that question very plainly: No.
Hopefully things will improve this month. Diablo III and Max Payne 3 show promise. Will they be enough to break this losing streak? We’ll find out in a few weeks’ time.
I’ve already submitted a story for approval to Popzara Games regarding Electronic Arts‘ earnings conference call yesterday, but I’m still thinking a lot about it.
I’m struck by the cautious and arguably negative tenor that was taken during the call when it came to EA’s position on console video games. EA isn’t going anywhere, of course, and console games will still be coming over the next 12 months, but something just isn’t right. Perhaps it’s because we’re entering a lame duck period for this console generation as we prepare for what EA calls Gen4– the next generation of console hardware. Perhaps it’s something more ominous, such as the reality of analyst observations stating that consumers are fleeing to other forms of entertainment. Either way, there were a whole lot of social, mobile, and digital mentions made… and not a whole heck of a lot of console mentions made.
I’ve talked about the decline of console gaming in recent days and months, and I think that it’s been easy to spot. Trends are key. Despite a hefty release schedule for console games in the final three months of last year, sales continued to trend down. Hardware sales have been trending down for all platforms since December, and April will make it five straight months of YOY declines unless the PlayStation 3 surprises and moves more than 205,000 units. That trend could be explained in part by the generation ending as I mentioned. Lagging software sales are another problem, though. Perhaps they can be explained by a generally weak release schedule that’s had one genuine hit in Mass Effect 3 and couple of moderate movers so far in 2012, but that doesn’t explain disappointing March sales that were down 26% YOY despite a decent slate of releases.
It can be argued that console sales will show more life once the next generation transition is complete, but what if it doesn’t?
There isn’t a guarantee that consumers will come flooding back to consoles if they’ve found other entertainment to enjoy instead. Mobile and social gaming are slated to increase by 20% over the next 4 years. Console growth is projected to increase by only 5% during the same period, according to EA, and that’s after this current cycle of declines that we’ve seen since since 2008. This indicates to me that while console gaming will still be a viable market, it doesn’t make sense for publishers to invest a ton of money on development if the risk is that enough consumers don’t buy in.
That’s where the revelation that EA is investing $80 million into next-gen development comes in. At first, I looked at this number as more of a positive. Then I thought about it some more. $80 million isn’t a ton. If we go by the assumption that next-gen development probably needs to start now (or soon) to have games ready for a release in the second half of 2013, that amount indicates to me that EA is probably staying away from major risk and taking a very cautious first step. They’re doing it because success in other areas of the business can subsidize development in a market that has potential, but not a lot of apparent strength. If not for mobile and social, it’s not out of the question that EA would be in a much tougher position moving forward.
It’s possible that my position is rather bearish, but listening to CEO John Riccitiello try to give a vote of confidence for console gaming to analysts during the Q&A portion of the call was painful, at best. There wasn’t confidence in his voice at all. There was uncertainty and hope for a turnaround, while the confidence was shown during questions about other facets of the business. I think that things are going to get worse before they get any better, but I also believe that the decline that we’re seeing is a necessary correction for an industry that got much bigger than anyone could have projected.
Look for more reactions this week as Activision shares its prior quarter results on Wednesday evening and then NPD sales data for April drops on Thursday evening.
I’ve been back in Massachusetts for three months now, and I’ve slowly been reacquainting myself with the landscape. I heard about a place called Game Play that was something new that had sprung up in my absence and wanted to check it out as a change of pace from Video Game Castle (which I love) and GameStop (with whom most of my recent experiences here have been poor). I didn’t know what to expect, and was surprised by how much I enjoyed the experience. It’s not perfect, but it’s a store with an independent feel and yet a very professional demeanor.
When I walked in, the first thing that caught my attention was the size of the store. It’s pretty large for a games-only retailer, based on my experience. All of the current generation platforms were well-represented, with a good selection of new and previously owned software. The original Xbox and PlayStation 2 also had fair selections of used games to look over. While (aside from the inclusion of original Xbox games) this sounds similar to any GameStop layout, the comparison ended with banks of TVs and gaming chairs for customers to play on. There was also more gaming-related merchandise, including some great t-shirts for sale that I had to force myself not to buy. The store was all about video games, but without the “corporate drone” feel of a GameStop location.
The gaming stations were pretty busy. For a fee per hour, customers can play games at will, or they can use the time to try out games before they buy them. If the gameplay hourly fee is used to try out a game and the customer decides to buy that game, the fee is applied to the cost of the game, which is a nice touch. It’s not quite the risk-free game trial approach that FuncoLand and a few other independent retailers have used in the past, but it seems fair given the setup and operating cost involved. I love the idea of having game stations like this. It doesn’t replace arcades, but if you have a free hour, being able to play some games on a nice setup like Game Play has is a nice idea. It’s great for parties, too.
The staff was great, to a person. The manager sincerely took to the fact that I was a new customer without going overboard. He described a bit about the store and where to find things, but that was it. Customers are given free reign to browse without pressure, and questions were answered with a smile and with as much knowledge as possible. If an answer wasn’t known, an honest “I’m not sure” was given, which impressed me as I observed a couple of interactions. There were two upsell items: one is a $15 annual membership card, which is similar to other gaming retail membership programs but also discounts the hourly rate for playing games in the store. The other was for scratch/damage protection for games, similar to GameStop‘s model. The pitch I was given was casual in nature, with no real pressure to buy. The manager was ringing my transaction and seemed more interested in getting me to come back because I wanted to, rather than investing in a card or other features to “win” my loyalty. I did take the card and the protection on the items I bought, if only because the pitch was so stress-free. Other transactions I witnessed with different staff members went the same way; there were a lot of passes, but rejections didn’t seem to matter.
Game Play also does one thing that other gaming retailers don’t do. New games sell for $55, not $60. It encourages new game sales and serves as a motivator to buy from this store. The manager explained to me that competing with a retail giant like GameStop is a major challenge, but consumers seem receptive to the lower price and that those customers usually end up being repeat customers. Cuts like that might not be possible with the pre-owned side of the business and trade-ins, but not once during my visit did I hear sales of a used game being pushed over the sale of a new game. The idea of a sales transaction of any type seemed to be the more important factor.
The store also hosts regular tournaments. There are sometimes entry fees to cover costs, but turnouts have apparently been quite good and these events build community ties. I’ve always been a big proponent of tournaments and am a big fan of Game Play‘s active role in helping to organize and host them. I’m probably going to drop in and watch the Super Smash Bros. Brawl event on February 25th. I won’t play (because I’m terrible, quite frankly) but it’s fun to get caught up in an event and see who comes out on top.
Game Play really impressed me, and I recommend it to other video gaming fans here in the Springfield, MA area. If the store can stay the course with great staff, fun events, and a low pressure sales environment as I saw this past weekend, then it’s a great alternative to GameStop and shows that brick & mortar stores just might have a bit more of a future than we think.