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The Market For Computer & Video Games

EVERY BUYER  EVERY BRANCH  EVERY WEEK Issue 616 Friday December 3rd 2010 £3.25

Games prices frozen despite 2011 VAT hike

Retailers plead for help over January 4th duty increase  But the call is falling on deaf ears – suppliers are likely to do nothing  Could this be the last straw for cash-strapped indies?

by Christopher Dring & Michael French

PUBLISHERS must lower the cost of games, retailers have warned – or they will cut back buying new stock when VAT rises in 2011. Buyers and store bosses are fearful that they’ll have to swallow next year’s 2.5 per cent tax rise in order to remain competitive – and want suppliers to help them keep prices below £40. But the games industry’s biggest publishers – including EA, Ubisoft, 2K, THQ and others – won’t comment on whether they will lower prices.

And the platform holders have all told MCVthat cost pricing will remain unchanged in the New Year. Retailers are dismayed at this alleged lack of support, with one senior buyer telling MCVit well force them to cut back spending for 2011. Other big chains have told

MCVsupplier silence has left them without a strategy, even though VAT goes up in just 30 days. Indies say they will suffer, too – and this could be the


04 NINTENDO HOLDS FIRM Format-holder says it is unfazed by Move and Kinect, and offers retail range advice

22 GAMESTOP’S GROWTH The global retail giant explains to MCVexactly how it will expand in Europe

24 SOCIAL MEDIA DARLING A year after its acquisition by EA we speak to UK Facebook games pioneer Playfish

26 PASSAGE TO INDIA We examine the games industry in one of the world’s most populated countries

33 RETAIL BIZ Previews of key games such as Golden Sun, plus charts and the High Street update

Now BBC’s Panorama turns on

video games by Michael French

AS IF accusing FIFA execs of bribery wasn’t enough, next week BBC’s Panorama threatens to lift the lid on ‘games addiction’.

With an agenda sure to put UKIE and senior publisher PR teams on red alert, the show examines ‘how manufacturers ensure gamers keep coming back for more’.

England may currently be in the grip of a cold snap – but the frost runs even deeper on the High Street

Earlier this week the series broadcast a sensational World Cup ‘FIFA’s Dirty Secrets’ episode uncovering alleged corruption voters deciding the location of the 2018 World Cup. Panoramasaid its

Will the

publishers help? Or has it got to the stage where they don’t need indie retailers?

last straw for them. Now some of the most successful small chains say they could drop new games altogether. “I am concerned about the effect it will have in the short term,” said Barkman Computers boss Nick Elliot. “There have been some Christmas titles that we are being extra careful on our stocking. The margins we operate on are miniscule.” Game On MD Matthew Brady added: “The issue is with new games – if publishers don’t adjust cost prices it’s pointless to stock them. Customers already

think that the RRP is £39.99 and some are calling for it to be dropped further. We would be looking for some form of price

movement from publishers.” Disks & Discs director Andrew Rawlinson said: “I think it will be interesting to see if the publishers help. Or has got to the stage where they don’t need indies?” But one publisher shrugged off the retailer fears as ‘panic’, saying: “Stores were more than happy to not change prices when VAT was cut – they surely understand this situation works both ways?”

revelations could ‘jinx’ and damage the hosting bid – and the games special is no less dogged. The episode’s broadcast has been timed to run “as the computer games industry launches its latest products on the Christmas market” and talks to “youngsters who describe their enthusiasm as an addiction”.

The episode “finds out why some people are calling for more research”. Panorama: Addicted To Games?airs on Monday, December 6th.

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