4 MCV 08/10/10 NEWS [LEADER]
SUPER POWERS FIFA HAD ITS largest launch ever this week, and the third largest of any game in the UK. Well done EA, pats on the backs
for everyone, yes yes. But as night follows day, No.1s
follow FIFA. What’s most interesting is the context around the
game’s arrival at UK retail in 2010. The supermarkets were, as ever, the noisiest
promoters of the game. That always makes sense as, Wii aside, you don’t
get more mass market than FIFA. But there were no quick cut-price deals this year;
Asda’s £29.97 was the cheapest deal on console, which is relatively conservative for this lot. Instead, the focus was on value incentives. Asda
would go as low as a headline-grabbing 97p, but really that was only with a trade-in of games so new that they had excellent resell potential. Sainsbury’s, Tesco and Morrisons all went sub-£30 with a catch: buy another game, or your weekly shop to get the deal. Loss-leading? Hardly, the money was harder fought than ever. None of these were ‘deals’ – it was a negotiation. And that’s because this year, the pressure is on the supermarkets to go further when it comes to games. No doubt about it. Their games teams will have pushed and argued
for more space, more operational power, more marketing in recent years.
“The pressure is on the supermarkets to go further when it comes to games. No doubt about it.”
Now these teams have to prove to their bosses that games are worth it, not just the latest opportunistic Harry Potteror DVD release to quickly pile high at front-of-store and draw people in. For now, the increased operational oomph around
pre-owned suggests it is worth it – and that these renewed efforts will last.
CORE STRENGTHS TO BACKTRACK A bit on that FIFAremark above – EA really does deserve applause for last week’s blockbuster launch. So too does Codemasters and its race to the top
with F1seven days prior, and Microsoft’s delivery of Halo: Reacha week before that. These three deliver an important message, as one publishing boss pointed out to us in an email this week: “Maybe traditional games are not dead! It’s time to talk up our industry.” He’s not wrong – the last three weeks fortell a bumper Christmas, and increased stability, if not a return to form for the market. And after all, a bit of optimism never hurt anyone.
Michael.French@intentmedia.co.uk
Blockbuster UK comes out fighting
UK arm hits back following trouble at US parent Retail giant to sell TVs and iPods Stores to be relocated onto the High Street Profits up year-on-year International business no longer for sale?
by Christopher Dring
BLOCKBUSTER UK is on the offensive following the Chapter 11 bankruptcy of its US parent. The company says it is unaffected by the development and has revealed to MCV its business plan for the next five years, which includes selling TVs and relocating stores. The firm’s commercial chief Gerry Butler also said the UK arm has seen its profits increase year-on-year and that there’s no need to close any stores. “Blockbuster isn’t a bad business, it just has a lot of debt,” Butler told MCV. “The debt got to $990 million and at some stage you’ve got to tackle that. Now the Chapter 11 allows the guys some opportunities to refinance the business.
“Blockbuster US is likely to come out of Chapter 11, perhaps at the end of the year. But it will be a very different
“
The problem in the UK is that people mention Chapter 11 and they say ‘Are you closing down?’ No, it’s rubbish.
Gerry Butler, Blockbuster
company than it is now with little or no debt.”
Things are very different on the other side of the Atlantic. “Now, its European
subsidiaries have no debt. The UK business is substantially up year-on-year – the UK operation is sitting on over £50m of net assets. It is an extremely well- funded, cash-generative business. Our core rental business is up six per cent, primarily down to Blu-ray. The problem in the UK is that
WWW.MCVUK.COM
Blockbuster UK is an “extremely well-
funded, cash-generative business,” says UK commercial boss Gerry Butler
supplying entertainment needs,” added Butler. “At the moment we are testing sales of TVs in 35 shops.”
people mention Chapter 11 and they say ‘Are you closing down?’ No, it’s absolutely rubbish.”
As part of its new business plan, Blockbuster says it will begin selling mobiles, iPods and TVs. The retail giant also told MCV that it hopes to move many of its stores from secondary sites to prominent High Street locations. “We are becoming more than just a rental firm, we are becoming a company of
”
Earlier this year Blockbuster US put its international business up for sale to help generate funds. But Butler now feels that this might change when the retailer comes out of Chapter 11. “Selling the international assets was one of the options for Blockbuster,” he said. “But I don’t think they will make a decision on that until after they come out of Chapter 11, and if they do come out of Chapter 11 then I don’t think they need to sell the international assets. But it depends on what the long-term strategy of the company is.” Blockbuster: 01895 258866
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