UK-headquartered retailer Game will be looking to make the most of the upcoming Nintendo launch to offset a weak Christmas.
Game’s performance in the UK continues to hinder the gaming retailer’s top line sales, with the lack of games console launches further softening demand. Console advancements are increasingly uninspiring for consumers, with manufacturers focusing more on the software improvements than an entirely new concept. New game titles also performed worse than expected, with only a few strong releases such as Pokémon Sun & Moon, seeing success for the retailer.
Over the Christmas period the retailer saw a weaker performance than was anticipated, with group GTV declining 1.6 per cent over the three weeks to January 7. However, when lower margin hardware is stripped out, performance is up by a more optimistic 2 per cent.
Given the struggling console and video games market, the retailer has done well to try to widen its appeal, having now opened seven in-store gaming arenas. While Game suggests these arenas have displayed ‘encouraging early results’, ensuring momentum and broadening the appeal of this service will be difficult to achieve. Game should look to launch free trials within the gaming arenas either for its existing Game reward cardholders or as a new year initiative to entice lapsed customers. This will increase exposure of its USP to more social and infrequent gamers.
Game’s proposition in Spain continues to be an area of success, though a weaker pound has inflated growth results for the first half year, local currency growth of 8.5 per cent is still impressive. However, the declining consoles market is less pronounced in Spain and its UK performance in this category may signal what is to come in its European proposition.
This year will be a challenge for the gaming specialist, but on a positive note, Nintendo will launch its Switch console – marking the first major new gaming concept in consoles since 2013. How Game supports this product launch could revive gamers’ passion for games consoles – using its gaming arenas could highlight the Nintendo Switch consoles credentials and prove successful in drawing in first-time gamers to try something new while still emphasising the unique selling point of its gaming arenas.
- Zoe Mills is an analyst with Verdict Retail.