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Video game indies turn to toys Independent gaming outlets embrace figurines and other toys to compensate for low boxed game margins...
THE CHALLENGED independent video games retail sector is turning to toys and gifts to survive.
In the search for higher margins, several respected names in the worlds of both High Street and online games retail have begun stocking toys and gadgets over the past 12 months. Although most new boxed video games have an RRP of £49.99, because of the market’s aggressive discounting culture, the consumer generally expects to pay around £39.99 – meaning indies have to cut prices and sacrifice margins, or lose out on sales.
Xbite’s Nick Whitehead said:
“We’ve expanded into other product ranges. With toys and gadgets, there’s no real price point that’s embossed in
COUNTER INSURGENT
ToyNews’ mystery columnist gets hassled on holiday and ponders over the impending Christmas toy price wars…
THERE once was a time when a holiday in early August was far removed from
the realms of possibility. Only once the new Argos book had been studied could I consider taking a week off. However, no longer are
there the nasty surprises in the main catalogue or the staff asking when something featured is coming in. So this year I took the snub for my Olympics tickets personally and buggered off for a week. With the internet, any major problems can be sorted, and my staff can always phone if they need to. But some reps didn’t get the whole international ringtone idea and kept trying to phone me. For once, I ignored them. Maybe I should have left the ringtone on high so Mrs Counter Insurgent would know how many calls I ignored.
SEPTEMBER 2012
As I had more time to read, I was flicking through the trade press and noticed how many ‘top toys’ lists have come out in the past month. I understand there are reasons for early publicity, but consumers this year are already dreading the money- spending season. I was staggered that the lists have expensive items. Last year The Sun decided
to release it own list of toys at ‘affordable’ prices; I was hopeful we could avoid a repeat of that.
The consumer does have an
eye on Christmas; the amount of customers who’ve started to save money in the Christmas club we offer is up, but the amount of items reserved is well down. They don’t want to think about it this early, they are confused about prices and are prepared to wait and see who blinks first in the price war. As an industry we have
some great toys for great prices, and at a time when consumers are feeling the pinch, we need to make sure that message gets across.
Every year the local press phone and ask for a comment. It’s simple: all I have to do is refer them to European prices, especially in France and Spain where they are so much higher than the UK. I embarrass my kids in toy shops abroad by muttering about prices. Sometimes I’m so shocked at a price my feet leave the ground and I foam from the mouth.
GOING FOR GOLD By the time you read this, the football season will have started and I bet some shop
somewhere will have Christmas decorations for sale by the end of August. Does anyone know of a website to name and shame them? The consumer wants better
value for money and toys offer that more than ever, but unfortunately some parts of the industry think toys should be sold below cost or offered at half an inflated price. I’m about to start a tote for
how low the Furby price will go. It isn’t a small number coming in – it’s a line that will give us squeaky bum time.
NO MARGIN FOR ERROR: (left to right)Xbite’s Nick Whitehead, Stephen Staley of Gameseek and Stuart Benson from Extreme Gamez...
a consumer’s mind of what they should be paying for it. So there’s a better margin out there. “The thing is, what do you do when a toy doesn’t sell? You get stuck with it, so stock management is critical. But certainly, games indies will have to diversify.”
Stephen Staley, MD of online retailer Gameseek, added: “Do you specialise in video games, or do you specialise in making money? The more diverse product range the better, as long as you don’t lose your identity. Besides, a lot of the toys we sell complement the games we sell.”
The owner of High Street store Extreme Gamez, Stuart Benson, believes a variety of products is key. “It’ll be very hard to survive in the future unless you’re willing to totally change and open your mind to stocking completely different products,” he said.
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