Be realistic with your selection of products for the US. The balance of power has shifted from the publisher back to the retailer.
100,000 units and it didn’t sell well, the publisher had to manage all the price protections and markdowns. “Now, under the same scenario, if the retailer is told he needs to take 100,000 in, he takes in 10,000 week one and asks for the publisher to ship more if the game sells. But retailers want publishers to have the extra inventory on hand, and if it doesn’t sell well… The risk has transferred from retailer back to publisher. “The best advice I could give would be to take a long and serious look at your long term product strategy, how you will address the ever-growing digital marketplace and what you can do to make your title unique within that space.”
[NEIGHBOUR TO THE NORTH]
Neighbouring nation of Canada is just as important a part of the North American market as the USA. Canada is home to the third biggest video game industry in the world. 16,000 people are employed by games firms across 348 companies, according to the Entertainment Software Association of Canada. This is due to the thriving development community in major cities such as Vancouver and Montreal. Many publishers have flagship studios in the region, including EA, Ubisoft, THQ and Square Enix.
A significant lubricant between these creative cogs is generous tax breaks – something that has tempted many UK developers to cross the Atlantic. But there are a number of long-running studios that have been creating popular games long before the big publishers conquered the region. Resident developers include BioWare and Silicon Knights. FIFA, Madden, Assassin’s Creed, Splinter Cell, Mass Effectand Dragon Ageare all developed in Canada.
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That’s not to say retail doesn’t have a strong presence in Canada. The sector is led by well-known chains such as EB Games, owned by GameStop, and Best Buy. Such is the strength of the
market, PlayNTrade – the world’s largest video games retail franchiser – expanded its presence in the region through a merger with a local chain earlier this year. “PlayNTrade just merged with the Canada-based Dimension JMM,” explains vice president of operations Martin Tardif. “We intend to maintain a leadership position in North America.”
But it’s a competitive market. Last year, HMV Canada dropped its games offer.
The ESA says the Canadian games industry generated $1.7bn in retail sales in 2010, with a whopping $886m taken through sales of console and handheld games, and $513m from hardware sales. The nation’s games market is expected to grow a further 17 per cent by 2013.