Ireland has a tremendous pool of talent and resources available to those who wish to succeed and while headlines in papers might harbour nothing but words of doom and gloom, this initiative aims to restore your faith in what we can achieve as individuals, what we can achieve collectively and we can achieve through perseverance. Welcome to The Gaming Liberty’s “We Are” initiative…
The next addition to the “We Are” initiative is actually based in retail. Competing with stiff competition found abroad, Gamesnash offers Irish games a quick and home-grown solution to shopping for their titles. We recently sat down with the guys from Gamesnash to talk business, pre-owned titles and what changes could be made to improve growth in Ireland.
The Gaming Liberty: Can you tell us a little about why Gamesnash was set up? What do you think Gamesnash offers that other e-stores might not?
Gamesnash: Gamesnash was set up back in 2007 to offer Irish gamers a domestic based online service. Our point of difference over the majority of online retailers servicing the Irish market is that we are based in and shipping from Ireland which means we offer the fastest shipping times of all online retailers. This is especially important with pre orders where we can offer guaranteed release day delivery.
TGL: How difficult is it to establish a competative online store these days?
GN: It is extremely difficult to establish a competitive online store not just in the gaming industry but across virtually all industries. As a smaller startup you are competing with established bigger players in the market with enormous buying power as well as stores located outside of the EU who are not obliged to include VAT within their pricing as we are based here in Ireland. This can lead to a perception amongst customers that the domestic based retailer is uncompetitive when in fact with VAT stripped out the domestic retailer may be substantially cheaper.
TGL: Is it hard to keep your finger on the pulse of the industry, and of the consumers, when it comes to what titles to stock?
GN: One of the key strengths of the Gamesnash operation is how much we interact with our customers. We offer a very personalised service and our customers are very quick to contact us with requests to stock games. We also track the search queries on our site and can identify quickly if a particular game we have not stocked is being searched for on a regular basis.
TGL: Gamesnash Live and GameClick are also owned by Gamesnash. Can you tell us a little about each, and the inspiration behind them?
GN: Gamesnash Live is a unique concept with the motto “gaming as it should be” Gamesnash Live is a cross between a retail store and a gaming centre – with a difference. We believe that gaming should be treated as a social activity rather than the traditional view of a gamer alone in their bedroom for hours on end interacting with the machine and whomever they happen to have connected to online during the game. Our concept of a gaming centre is that of a family friendly environment where gamers of all ages can come and play the latest games on the latest equipment in a location designed to mirror their own homes. We can cater for larger groups / corporate events and childrens birthday parties all designed around social gaming. Our centres also offer the chance to try before you buy – where you can make sure you like, enjoy and really want that game before handing over your hard earned cash.
Gameclick is something that we to be honest kind of fell into. We were approached by the operators of Gameclick to consider purchasing their stock / library as they were closing down. We had a look at the reasons why they and indeed other game rental sites before them had closed and felt that we could integrate a rental operation into our existing business and overcome the obstacles that they had faced. We ended up doing a deal to take over the entire operation. We’re very happy with the progress made so far and believe that Gameclick has a secure future in the Irish rental market.
TGL: The pre-owned market is something it seems the next generation of systems might openly rebel against – with rumours of the new Xbox supporting software that might refuse to play pre-owned titles completely. With developers stressing that used titles impact on their revenue, can you tell us your point of view on used titles with respect to online retail? What kind of impact do you think, if any, pre-owned games might have on the next generation of systems?
GN: The pre owned market is a topic that seems to polarise viewpoints from every aspect of the industry. At first glance it appears obvious that pre owned game sales have a negative influence on new game sales. When a customer chooses pre owned the developer loses out on the revenue from the new game sale. This is the viewpoint of the developers and publishers referred to in the question. However there is also an argument to be made for the positive influence on new game sales. A huge portion of new game sales are funded from trade ins of pre owned games and these new games may not have been purchased if there wasn’t a facility to trade in unwanted games towards the purchase. Also how many of those pre owned sales purchased the game at the cheaper price available and would not have purchased it otherwise ?
What isn’t generally acknowledged is that particularly in Ireland and the UK the retail price of new games is heavily subsidised by the pre owned market. The pre owned market for console games is propping up the retailers and keeping game prices for new copies artificially low. You can get the latest releases for €49.99 – €54.99 instead of €64.99 – €69.99 (being the RRP of top titles and the price that games should be sold at to provide retailers with the accepted general retail margins needed to stay in business) The lean towards pre owned was in part fueled by the high costs of new games – costs set by the publishers. The pre owned market developed from the customer desire for a cheaper alternative to the new game prices being quoted and was an acceptable solution to the retailers who were not able to survive selling new games at the full RRP. It allowed retailers to drop the prices of new games – with the loss in revenue being made up for by the extra margin / revenue being generated by pre owned games. The pre owned market has perhaps become too big a part of retail operations here. Retailers have slashed new prices so much that it’s not uncommon for new games to be sold at a loss to generate footfall and trade ins which can be then sold at a higher margin. There is no doubt that the cheaper new game prices have a positive influence on the sales figures for the publishers.
How much all of the above factors ultimately influence new game sales and whether or not the overall result is positive or negative is something I don’t think anyone can really answer. I personally believe that recent moves to generate revenue for publishers from pre owned sales (online passes etc) are reasonable in principal but I would much prefer to see deals struck to revenue share with the publishers directly rather than impacting on the customer.
Publishers and retailers have to remember at all times that they both need the customer to be willing to buy their products and I think any moves to completely eradicate the pre owned market would be a big mistake – especially if one console were to do this. If the next generation Xbox were to implement such a program it would severely hamper sales of that console and would drive customers to other platforms. I can’t see it happening to be honest but if it does it would need to be coupled with a large reduction in the cost prices to retailers of the games for that console. Quite simply if in the morning the pre owned market was eradicated on the current generation of consoles retailers would have to price new games 20%-25% higher to survive (and even then the drop in demand would most likely prove fatal to the retailer) If the publishers slashed the cost price of their product to the retailer this would allow the retailer to maintain the current sale price and maintain some demand. Realistically though the cost prices would need to be slashed even further. This would allow the retail price to be lowered further to make up for the fall in demand from those unable to afford the new game now that the funding via trade ins were no longer an option.
In summary I believe that the pre owned market is essential to both the retailer and the publisher under the current pricing model. If the pre owned market is to be taken out of the equation it needs to happen in conjunction with a significant downward shift in new game pricing or else the industry as a whole will suffer. Ultimately as a retailer these decisions are out of our hands and all we can do is adapt to the changes if and when they come.
TGL: What do you have planned for the future?
GN: Our plans for the future are to continue to build the Gamesnash brand online and to roll out expanded Gamesnash Live venues nationwide.
TGL: Finally, if you could make several key changes to the Irish gaming retail market, or distribution sector in Ireland, that would improve overall trading standards – what would they be?
GN: From our point of view we’d like a level playing field from which to compete against the bigger players. It’s very frustrating to see exclusive deals, discounts, game content and subsidies etc being offered to the established industry leaders. It makes trying to compete with these players / grow a startup business extremely difficult to do. We’d be happy to share revenue with publishers when we sell their pre owned games in return for better pricing of new games. We think that this would benefit everyone in the long term be that retailers, publishers or developers but most importantly the customer themselves.
You can reach Gamesnash through the following links: