DISTRIBUTION: MARKET ANALYSIS 0N PRE-OWNED
Darren Houghton, UK General Manager, Gem
“A healthy second-hand market can be a benefit to the industry and its
customers. I am sure going forwards a suitable agreement can be reached between all parties that will satisfy everyone. Maybe in the future distribution will play a key part in trade- ins, working on behalf of publishers and retailers to solve the current impasse.”
Andy Payne:
“Retailers provide a service to their customers and pre- owned is a factor of price
and the nature of the product. If a game is £40, it should have value to the purchaser, and if the market allows a re-sale value to be achieved, then so be it. If the product was cheaper, the re-sale value will drop and therefore that market may decrease. If the online element is key, consumers will only trade something they no longer enjoy.”
Paul Williams, Head of Buying, Ideal Software:
“Retailers should sell and do anything that creates them profit and I applaud
their business mind for that. But as a distributor it does hurt. Many moons ago when a PlayStation title went Platinum or an Xbox title went Classic, you would sell twice as much as you originally did on day one. Those days are long gone, but if a game is really good you’ll find that it never gets traded in.”
ON INDEPENDENT RETAILERS BUYING STOCK FROM SUPERMARKETS Paul Williams:
Gareth Dain, MD, Creative Distribution:
“It’s fair for indies to buy from them. Only
publishers can convince
supermarkets not to trash the prices. I am informed that the strategy the supermarkets use does work. Also, we have to accept that supermarkets are a business and have no morale or legal obligation to protect the interests of the smaller business – however unfair it may seem. Regrettably, indies are now a very small fraction of our business. For me this is an absolute tragedy.”
“I say keep doing it – whatever it takes to feed their families for the week ahead. How can you
blame indies? If they went to the official distributor they would have to pay more than the retail outlet. Yes, it’s fair for supermarkets to go low, but if the publisher didn’t supply them, they would have no product to go low on. Indies are our business – if they die off, so will Ideal. We’ve always been fully committed to them and will continue to.”
TOP OF THE BOX
MCV provides in-depth updates over the next 10 pages on the following key distributors:
Craig McNicol, UK MD, Koch Media
“It is a free market, and of course it does not sound equitable, but the broken
element may not be fixable. We deal with the entire industry and indies are important, although in recent years it is arguable that online indies have become equally as important as store front indies.”
p40 Bright Red Distribution p40 Ideal Software p43 United Software Distribution p43 Curveball Leisure p43 Meroncourt p45 Koch Media p45 Interactive Ideas p45 Game On p46 The Producers p48 Realtime Distribution p48 Creative Distribution p49 Gem p50 TripleACodes p51 AntiGrav
ON EXCLUSIVE DISTRIBUTION DEALS Gareth Dain:
“Exclusive distribution deals work for the smaller publishers, from the point of view that they need sales people to push their titles. When done with the right distribution partner they can work. However, for larger publishers I do not see the sense in restricting their sales by using one partner. We rarely see exclusive retail deals unless it’s a niche product so why is it the norm at distribution?”
Paul Williams:
“In my eyes, exclusive distribution is nearly dead. How can a distributor charge more than retailers but hide behind the exclusive model and hold
small stores to ransom? I’m not saying these distributors don’t do a great job, but as a business model it doesn’t add up. It originally added stability for publishers, but nowadays this seems dated as the exclusive price is, nearly 85 per cent of the time, higher than retail.”
ON WHAT CAN BE DONE TO IMPROVE THE SECTOR Richard Marsden:
“I think that independent retailers have been ignored by most in distribution and as a consequence tough times have been made tougher.
This is one thing Realtime has identified and we intend on offering products that these retailers can make margin on.”
36 November 12th 2010
Martin Richards, MD, Game On:
“From a focused service point of view, exclusivity can of course work. However, it also depends on whether value and margin is shared correctly
and ultimately passed on to the consumer. In some cases, exclusivity can also stifle retailer and consumer choice.”
Dave Cotton:
“To ask everyone to be 100 per cent honest about what they are offering. Also, the industry needs more open distribution – it creates healthy
competition, which in turn should mean that distributors are, in financial terms, carefully run.”
Michael Breeze, Marketing Director, Interactive Ideas:
“In general I believe that the UK distribution sector is pretty healthy. Some companies come and some go, but there are many well run distributors that have been successful over many years. There is competition but most have adapted their service to their particular strengths and market focus.”
www.mcvuk.com
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