What EB Games Can Learn From The Demise Of GAME In Australia

When we spoke to GAME Australia's ex-Managing Director Paul Yardley for our look at what went wrong with GAME's Australian retail operation we asked him a question: how optimistic did he feel about the future of video game retail in Australia? And what chance do remaining specialist retailers like EB have in a market that's clearly in decline?

Paul Yardley said that he felt as though specialist games retailers did have a future in Australia in the short term, but in the long term changes would most likely have to be made.

"I have a real worry about the future," said Paul, "because if you think about the natural evolution of this market — and let’s be clear boxed products aren't going away for at least five or ten years — someone’s going to have to sell them. That could be in a generalist sense like a JB Hi-Fi or an EB. But the volume of those sales is going to decline. If you're EB you have a relative large store footprint and I don’t believe that store footprint is required actually.

Most observers, including Paul himself to an extent, believe that GAME Australia's own large store footprint was a leading factor in the retailer going into liquidation. Paul said that if EB isn't careful, it might end up in a similar situation.

"Your average lease length as a retailer can be anything between four and six years so your ability to respond to a change in the market is low," he explained. "It’s really low. What does that mean? Well, if I was in EB’s shoes I would be thinking very carefully about my store portfolio and working out exactly how many I needed in five years times and make some tough decisions about what stores were going to be making money on five years time.

"There are 22 million people in Australia, and EB has 360 stores in this country? If you do the maths, GAME in the UK had 700 stores and were the market leader and had all the market power. The UK has 70 million people and GAME UK went bust with 700 stores. I know Australia’s more spread out, but I still don’t think that’s the right number of stores."

Paul was keen to reinforce that he didn't think EB was going to go under any time soon, just that difficult decisions would most likely need to be made in the coming years.

"I’m not going to prophesise doom on EB because we need specialist retail, we really do, but they definitely have to think long and hard about the property piece and how they make multi-channel work for them," he said. "I don’t think they’re dead I think they need to use their position — which is a really good one, they’re the biggest in the country, they have all the suppliers behind them. If they just do the right things they will still be here, but it does require a different skill set."


Comments

    I dont understand why anyone would bother with EB when chances are theres a JB hi-fi up the road selling games for $20-30 cheaper?

      Some (rare) people still believe in getting good customer service, while you won't get that with every eb sales person, you'll very rarely see it in a JB sales person. I used to buy from eb where I used to live because I got along with the guys who worked there, always good for a chat and didn't get tired of me abusing the 7 day return policy on bad games.

      Oh yeah their return policy too.

      Exclusive content still exists so there is that also.

        I don't go to a shop to have a chat with the employees. I go there to buy a game and leave.

          Yeah I don't buy a game so that I can return it. It's just not the right thing to do.

            I never bought a game with the intention of returning it. Some games are bad. Say duke nukem forever or aliens colonial marines, name me 2 people who are proud of those purchases?

              I am proud of Duke Nukem, I loved it it.

              Haven't tried Colonial Marines.

                Yeah I liked Duke Nukem - it played just fine.

                There were a couple of crappy sections but overall it was good.

                Having said that I bought it at full retail with the intention of trading it in for the same or higher amount that I paid for it, which I did, So I essentially view it as a free purchase. I'd have been upset if I'd paid $80 for it with the intention of keeping it, but then I wasn't that silly.

                  I'm proud of my Duke Nukem purchase

              DNF is an amazing game, you just have to be in a fun and retro mindset to enjoy it.

              right so if you buy a ticket to a movie that is bad, you should be able to get a refund on the ticket because you made a bad choice?

              you know EB then sells that game again at full price, meaning it's no longer 'new'. i'll take online stores any day thanks. the sooner EB dies the better.

                You know you can get a refund after the movie has started provided you leave before halfway.... Kind of like the game situation prividing it's within 7 days. But some people abuse it rather then actually returning on the very rare occasion something is nothing like what you expected or were told or if it requires Internet access and you do t have etc...

              I neither return badly written books or ask for a refund after seeing a crap movie. If EB policy allows you to return a game because you didn't like it. Fair enough but why do they do that? Are they desperate for cash?

              I own many terrible games. I don't think you should be allowed to return 'bad' games. They should sit there in your collection as a reminder to not buy crappy games.

              Like Naughty Bear, or Blood Bowl

              I have only recently moved to steam for my games. not because I wanted to! but cause the games I want want to install steam anyway. I did get black ops 2 from JB cause it was 69 as opposed to 99 at EB. I dont care how good the service is 20-30 bucks for a chat (I have friends for that) But I did like their return policy I got battlefield 3 and it sucked sooo bad! and I took it back, he asked whats wrong with it. I just said Id rather have teeth pulled out then play tit. and swapped it for Black ops 1 haha

              as someone who has worked in retail for quite sometime let me just say that when you return a game because you simply didn't like it the staff at that store definitely minded. They just didn't say anything to your face. You are probably known throughout the store as that "time-waster" and so they awkwardly try to keep conversations with you to as short as possible you are just too oblivious to it

                That's an awfully cynical comment.

          In which case, the store is not for you. And it's probably not for most of us.

          There is a definite place in general for specialist stores, where you can go in, chat about the thing that you and the employees love, and get some genuinely good advice about what to purchase. Unfortunately I think that it's a model that just doesn't work that well with gaming nowadays.

          If you think of, say, an auto store. You chat with them about the best way to fix a faulty headlight, or whether that brand of polish gives good result, or have you seen this new oil that we just received in stock? You can genuinely learn stuff.

          But with a gaming store, the Internet has already armed most of us with the knowledge of what we want to buy, what all the big name items are available now or coming soon AND what the best prices are before we walk in. If you want a particular title then you're not going to change your mind and pick something else instead. There's very little other than general chit-chat and aggressive upselling that the store can add to the dialogue. So if enthusiasts have very little reason to shop at a gaming enthusiast store, what kind of market does that really leave them with? Mums buying presents, and...?

          It would be nice to think that there was a permanent place for a store that catered to what we love. But I think that their time has passed.

          Last edited 17/04/13 1:36 pm

            Mums buying presents, and...gamers that buy collectors editions.

            Oh I suppose the bargain hunter, like me, that will have a quick scope of their sale items then realise that they're no cheaper than online / JB and walk on by.

            And those that really like buying a game for $100 and then trading it in a week later for $17.

            I can't think of any one else.

              Generally collectors editions can be bought overseas for less cost than EB offers.

          I would suggest buying from the Internet.

          Last edited 17/04/13 1:45 pm

          Most of the time I wasn't there to buy games at all, I was looking to kill time while I waited for my wife or I was waiting for an appointment.

          Yeah, people use Facebook to make fake friends. Never thought people were doing it in real life as well.

        Every EB I've been to has been staffed with people who don't want to be there and don't seem to know jack about games.

        My experience is that JB and EB are pretty much equivalent in terms of customer service and product knowledge. There are good and bad staff at both of course. I haven't had a particularly bad experience at either chain.

        The problem as I see it, is that EB is a specialist store whose staff don't actually have any specialist knowledge. I'm not sure that they know any more about the product than the AV guys at Big W, who receive no training. Part of the problem is that gaming doesn't really require any specific expertise. It's not like Games Workshop, where it can really help to talk to an experienced painter. It's closer to DVD or book stores, where it can be cool to have a guy that recommends awesome obscure stuff, but it isn't really necessary. Obviously, they can help grandma pick a game for little Johnny, but I think that 'ignorant market segment' is quickly evaporating. It can also be taken care of by non-specialty stockists.

        I also think a lot of parents head straight for EB. Their kid asks for a game, and the parent doesn't know a thing about games, so they probably go to EB based off of the name alone.

        Are you insane? JB generally offer great customer service by LEAVING YOU ALONE UNLESS YOU ASK A QUESTION! And they dont pressure you to sign up for promos. EB is great for used games from previous generations, but buying new? Noooo.....

        Oh yeah their return policy too.
        that's the reason I go there. plus, i live about 2mins away from my local. if they closed that store, I'd definitely go elsewhere.

        The flip side of their return policy is selling used games as new.

          Which could take a hit if the rumours about next gen consoles not playing 2nd hand games is true...

          Which people should expect if they make use of the returns policy. What else would you expect them to do with returned copies, if not sell them?

            I'd expect them to sell them as used copies, which is what they are supposed to do. Then again, Dick Smith has been caught selling returned stock as new a bunch of times.

              If you bought some clothes from a store and then returned them the next day saying they were the wrong size, what would you expect the store to do with them? If they're in good condition, they'll sell them to someone else. If they have been spoiled in some way, they wouldn't let you return them. I'd be very surprised if they just ate the cost.

              Why would you expect a game store with a returns policy to act any differently? If they sell you something that is damaged as a new product (scratches on the disc, creased pages in the manual, used DLC codes, etc) you obviously have a reason to complain, but complaining that the disc has been in another console seems a bit of a stretch.

                Because that's not even remotely legal. Returned stock, no matter the condition, is not new. They have to mark it as returned before they resell it. It sucks if people are abusing the returns system (I think that is unethical), but that doesn't mean EB has a right to violate consumer protections either.

        Are you kidding? Their customer service is suffocating! When I pick up a pre-order during my lunch break, I want to pay for it and go. I don't need the staff asking me heaps of questions to try to get the most out of me:
        * do I want some stupid scratch insurance?
        * are there any other games you might be interested today?
        * are there any games you would like to pre-order and put a deposit down on?
        * do you have any games you'd like to sell for some store credit?

        Furthermore, their service is terrible. The first thing I did when I went in was to give them the receipt for my pre-order so they could go out the back and fetch it. So why do they serve the guy that came in for the same product after me while I had a browse around the store while waiting? Why didn't they bother to bring my copy out?

        I'm similar, I've slowly got know the people at my local EB, and get great service, don't even have to ask for a price match, just give them the nod.

        The main thing that is unfortunate about EB for unknowing customers is obviously the huge markup on prices, for parents or people not familiar, they're the ones getting screwed, but i guess that's part of EB's business strategy.

        Also the perks of the "EB World" membership pay off for me.

        The main thing that pisses me off with EB is then general poor store organisation, for the life of me i don't understand why that can't make an effort alphabetically order the games.

          The reason they don't alphabetize games is pretty simple man. Too much time, with no payoff whatsoever. I can say from much, much experience even spending the time keeping the games nicely stacked or spaced properly on the wall felt like a constant losing battle. There is no way you could alphabetize them without having to redo it every couple of hours or so. Simply not viable, not with the the lack of payroll given and the constant arbitrary tasks being given to staff members.

            it's really not that hard to alphabetise product and keep it organised, when you know what it's supposed to look like it's easier to spot things out of place and slap it back to perfection.

        HA!

        Customer service at EB Games? I've been to several and never had a good experience.

        JB Hifi aren't great but they're a lot better than EB.

        I agree with you

      I don't know, good deals? EB currently has a half off deal for the season pass for Injustice if you buy the game and pre-order the next Arkham game.

        So you get a modest discount if you commit to spending $150 or so? Great.

        Personally i'd wait 9 months from the release date and get the games for $20 each or less, unless PS+ gives them to me for free beforehand.

        Others will purchase the item for nearly half EBs price through a UK importing online retailer.

        Others will wait for the Game of the Year or such edition to emerge and get it with all the DLC without being fleeced.

        My point, I guess, is that EB Games can be good value compared to those Mass Retailers (K-Mart, Toys r Us, Big W etc) that really have failed to offer the consumer any reason to buy from them, but when compared to the likes of JB or online retailers it's very difficult to argue that EB offers good value.

          That "waiting to become cheaper" is a pretty lame excuse. You could say the same thing about movies, "Why pay to watch it once now when I can wait 6 months to pay the same price to watch it anytime I want? Either on DVD or download.". Or even with bands. "Why would I pay to watch them perform live when I can just listen to their songs on Youtube?". I'm also sure people who torrent anything and everything like to use that excuse as well.

          That waiting period can also hurt multiplayer games. What if everybody waited for CoD to drop in price, but one guy didn't? So he jumps online to realise there's nobody to play with. Which is a problem with multiplayer games in todays world, all of them suffer from time. Or publishers refusing to support them after release.

            I agree with your points and your examples.

            As it goes I generally do avoid going to the cinema, largely for exactly the same reason that you state. $17 ticket x 2 + Parking + Drinks + Popcorn = $50 to $60. For what? To sit in a room listening to others munch crisps and answer their mobiles? No thanks.

            I also avoid concerts. I've never seen the point of them myself. I've been to stadium concerts and saw bands that I love and wonder why I wasted $100 or more when I all I do is get to listen to something that is far less the fidelity than I could get from my home stereo. I've paid for the enjoyment of standing in a wet and cold field next to 10,000s of complete strangers that are intent on knocking my beer out my hand. No thanks.

            Oh but it's all about the experience. Pfft.

            If Bob Dylan and David Bowie were playing at my local RSL for $5 entry I'd probably give it a miss. Well, maybe not.

            Yes, there are people that are hell-bent on buying games on Day 1, and in 2011 I was one of them. Then I realised that it's just not worth it - especially for those that are time poor. Sure, if I was a stay at home teenager then I'd have the time to spend on a new release to put in 20, 40, 100+ hours. But as a working adult it's hard to scrape the time together to finish even a short campaign game.

            And yes you make a valid point about multiplayer not lasting very long. I've bought several reduced price and pre-owned games and have frequently found multiplayer switched off or virtually dead. It's a shame, but a reality. Again, if you have the time to invest into multiplayer during the first year or so of release of a game then it's worth buying on Day 1 but if you don't then it probably isn't worth it.

            I could go out today and buy Bioshock Infinite for $88. (EB Games) Or, I could go to JB and buy Batman Arkham City, Lollipop Chainsaw, Street Fighter X Tekken and FEAR 3 for $80. Given that the latter choice includes genre leading and highly acclaimed games that will offer me a huge amount of gameplay hours even with no multiplayer, I personally find it a much more attractive proposition.

            I probably will buy Bioshock Infinite and I suspect that I will be in awe of its graphics and story, if not the gameplay, but I know I will be if I buy that today or if I buy that in 15 months when it appears on JBs 2 for $40 list alongside Crysis 3, Dead Space 3 and Far Cry 3.

            Why is it a lame excuse? I save so much more money buying AAA games that have been released months ago. Its the same experience for less the price. Big companies love making money off early adopters.

            Not that its wrong mind you, if someone is willing to pay top price to be the first to own a piece of gadgetry then go for it. Just don't expect everyone else to be as impatient.

            Multiplayer isn't really my thing, so all the better for me!

          Less obvious exaggeration would give your words more credibility.

        dude, go to EB, give em $10 to pre-order Arkham Origins & buy the season pass for $10.
        cancel the pre-order. get your refund. keep the cheap season pass.

      7 Day return policy. That's it. I buy most of my games from OZGS or DC but occasionally I'll decided I either don't want to wait for shipping (which is a very rare thing) or I'm not entirely sure about the game and that 7 day return policy is quite enticing. What I've done, on multiple occasions actually, is buy a game online then while I wait 7-day-it from EB. And of course you can always price match whatever JB are offering.

        Yeah, that's just wrong - buying an item with the full intention of returning it. I don't see how that's any different to theft.

        And it's silly for EB to offer that facility and allow it to be abused.

        I remember buying a few PS1 games which were just junk and felt ripped off. I would have appreciated a return policy for those. But for me, the quality of PS3 games have all been excellent. Or very nearly all. Blacksite 51 (or whatever its called) was very buggy, but it still played well. Bodycount was panned by the critics, as was Call of Juarez (the most recent one), but both were still a lot of fun.

        MMA is rubbish, and the Naughty Bears games are shameful, but apart from that I really don't see the need for a 7 day return.

          That's silly. It's not theft. It's totally legal and it's something that EB have agreed to.

            I wouldn't describe it as theft or piracy, but its unethical for the same reasons.

      EB matches the JB price each time. So you go to JB get price go to EB, get game AND a great return policy and anything else you might see there.

        If they're such good value, they should offer to beat the price, not just match it. If I see two places where one is cheaper and the other price matches, I'll get it at the one with the cheaper initial price. I want to reward them for their initiative in lowering prices to get my business.

        I've only ever returned 2 games to EB (one of which was second hand). The first (a Sudoku game for the DS) because it lacked the "pencil marks" functionality which is fundamental to Sudoku strategy, and the other (Shadowrun for the Xbox 360) because I thought I was buying a shooter with a plot, and instead was given a multiplayer/bot shooter.

        In both cases I turned the money around and bought something else straight away.

        I usually do compare prices, and occasionally buy games at EB when the prices aren't ridiculous or where they have a title not available elsewhere. The JBs and EB near my work are only about three doors apart, so it's not hard to do.

        Now, the really annoying people are those who go to a retail store for the staff expertise, then immediately leave to buy online.

      Exclusive content, and the fact that you can always price-match games (which I do all the time and the staff know me as "that guy who price-matches games every single time").

      EB can match their prices. Also, there's the 7 day return policy, the rewards program (EB World), the fact that they have better customer service and that they actually know a thing or two about games.

      There's an EB six minutes from my house and another one six minutes from my work, by contrast to visit JB Hifi I've gotta go 20 mins from home or about 15 from work.

      Add to this both EBs are in a mall whereas the JB is out with some big box stores, there's more chance I'm gonna get to the EB than the JB and given that EB price match (even when they'd rather not, case in point the copy of Prototype 2 I scored for $30 the other week) it's not really an issue.

      JB need to expand out to my area, having said that they do have the better trade in prices so if I want to trade for a new game I'll generally trek to JB.

      I have found recently that EB Games in my area have a broader selection of games than JB HiFi and Big W.

    Because you can pricematch it AND get a 7 day return policy to go with it. Plus, they also get exclusives that other retailers don't have access to

      It's a shame that you can't price match exclusives.
      And if you price match a preorder, they have the right to refuse you any preorder bonuses they have. Though if they're nice, they usually won't.

        This is the reason I don't preorder;

        a) they'll always have the game, unless its something weirdly rare
        b) the dept stores usually bring the price down on week one sales so may as well price match to your advantage.

    I think that our (re: gaming) industry lends itself well to innovation and EB Games should really be taking advantage of the many interests that gamers have in common outside of gaming, run some events, some in store MtG tourneys after hours, the odd LAN etc or hell, consider organising a SC/LoL national tournament in a similar fashion to an MLG. Also chopping 10% off their prices wouldn't hurt >.>

      Good point. But I can't imagine EB doing those things - if not just for the fact that they're mostly based in malls that have set opening and closing hours.

      Which leads me to wonder why other outlets aren't more successful in selling games.

      Why isn't there a chain of internet cafe's that double up as a good game retail outlet? Why don't we have game vending machines? (can i copyright that one?).

    Australia needs more Shin Tokyos.

      Shin Tokyo has a fantastic selection of DS games.

    I honestly think in order for EB Games to survive they need to actually become a specialist game retailer. What's the point in having a dedicated games store when places JB Hi Fi and Big W have a better range of games?! A friend of mine went to buy Bioshock (1) at EB and they told her it's really hard to find and they don't stock it any more. She went accross to JB and found multiple copies. I used to go into EB hoping they stocked/imported harder-to-find games like Okami on Wii, Metroid Prime Trilogy, Final Fantasy IV on DS, but no. Now I just buy all my games new online.

    First mistake = speaking with GAME Australia’s ex-Managing Director Paul Yardley.

    EB will go under as soon as whoever's holding the purse strings gets tired of losing millions of dollars a year. Could be decades away. Could be tomorrow.

    EB need to "make multi-channel work for them". What multi-channel? They have oversized stores with unfriendly staff selling over priced used products, and unsealed and frequently imported products which are quite often over priced when compared to online options.

    Sure, they DO have a website. They have an online presence., But if I look at their website the majority of games are only available in store. And it's not actually that easy to browse through their web store. So do they really have multi-channels? Seems to me that they are heavily reliant on their retail stores and have barely even started getting their online presence to where it needs to be.

    Still, there's no other competition so it shouldn't matter. Oh, apart from the 10,000s of ebay sellers and the 100s of Australian and UK online retailers that have now been established for several years.

      EB will go under as soon as whoever's holding the purse strings gets tired of losing millions of dollars a year

      Source?

        My noggin.

        Think about it. Do you really think that EB is making enough money by selling Azura's Wrath for $20 in order to pay for high mall rents, staff, marketing and whatever else? I don't.

        Look at GAME. Their business model was virtually identical to EB, and GAME were hemorrhaging money for years. No one knew until it all collapsed.

        Sure, EB are now the only show in town, except for JB and the hopeless mass retailers, and a nominal amount of independent game retailers. But the games market has been suffering for a few years already now.

        How many people rushed out and bought the Wii U? Not that many. Why? Partially because of the rise of casual and mobile gaming on smart phones.

        Retail prices of games are plummeting. Azura's Wrath was released in Feb 2012 - just over a year after release it can be picked up for $20. The retailer isn't making much money off the sale of that item.

        Darkness II was sold for $18 about 2 months after release.

        JB has it's 2 for $40 deal including SSX - (released Feb 2012) and Lollipop Chainsaw (released June 2012), amongst other relatively recently released offerings.

        PS+ gave us F1 Racestars within 2 months of it's release date - for free.

        Casual gamers don't need to shop at a retail store for games.

        Experienced gamers don't need to shop at an over priced retail store for games. They can buy much cheaper online. They can go to JB. They can wait for a price drop.

        I personally can't see how EB makes enough money to cover its costs, so my noggin suggests to me that they're not. And they won't.

          Is this how you usually come to conclusions? EB is in no current danger of going under. Stores are underperforming, you got that right but that's where you need more than just observation. That stupid EB Games Expo and their online store have proven to be extremely profitable, so much so that as of 5 months ago (the last time I worked there), it was making more money than retail.

          I got my info from head office. EB will die, for sure but not for really any of your reasons. I'm not sure where or how you're drawing comparisons between GAME and EB's business models either. They're extremely different, OBVIOUSLY so.

            Oh I'm sorry, EB don't have retail outlets in malls?

            They don't sell a mix of used and new games?

            However obvious there differences are they sure do well to make them not very obvious at all.

          Your noggin isn't a source, sorry.

          EB Games Australia recorded a profit of $35 Million according to GameStop's (the owner of EB) last annual report (2011).

          The 2012 report hasn't been published yet, but current indications point to a drop in earnings by about 5% for the company (GameStop) as a whole, and EB Australia will probably be in line with this.

          EB isn't going anywhere, despite what your noggin thinks.

          Last edited 17/04/13 5:02 pm

            Well that only works out to about 97 thousand dollars per store, your local corner shop proberly makes that much profit.Globerly it's even worse about 59 thousand per store and as the demise of GAME taught us if the overseas operation fails so will the local stores.

          You make a good point there, I got Child of Eden last year at EB for $15 traded it at JB (when I discovered I didn't like it) for $19!!! Also got Shadows of the Damned for $15 which was a really good buy!!

      EB will go under as soon as whoever's holding the purse strings gets tired of losing millions of dollars a year

      I'm pretty sure if this was the case, it would already be pretty tiresome for the purse string holders.

        These things typically get ignored, or rather, accepted.

        Look at GAME. Losing money year after year. It wasn't a matter of good year followed by bad year. It was a matter of bad year, bad year, worse year, even worse year, bad, bad, dead.

        Why should EB be any different?

        We know that the mass retailers use games as a loss leader, and we know that several mass retailers have recently jettisoned their games (and movies) divisions. Those mass retailers were losing money until they decided that that doesn't make particularly good business sense - it only took them a couple of decades or so.

        EB are the largest gaming retailer in Australia. That's a great position to be in. So I would say that the purse string holders are simply saying it's worth losing money because the potential is that the gaming industry will flourish once more and they'll be able to capitalise at that point. Problem is that that won't happen and EB will be long gone if by some miracle it ever does.

          I don't know, man. There might be entirely different business plans at work here. Being big, and with a multi-national parent based in the US, EB might have better buying power than GAME did (GAME's big problem was being forced to buy too much of the wrong stock). They certainly seem to be able to command exclusive deals to a much greater degree than GAME ever could, speaking volumes about their different place in the games market.

          Also, your argument appears to be entirely speculative... which is fine to a point.

          But ultimately, I don't think anyone just ignores an ongoing annual loss of millions of dollars :P

            "There might be entirely different business plans at work here. "

            There isn't.

            GAME sold new and used games, primarily from mall based retail outlets.

            EB sells new and used games, primarily from mall based retail outlets.

            "EB might have better buying power than GAME did".

            Maybe. But even if they do, how much of an impact would that make? My (likely correct) guess = not much.

            If GAME expected to sell 100,000 copies of a game it would be able to negotiate a buy price from the publisher / distributor of (let's say) $60 per unit.

            If EB expected to sell 150,000 copies of a game it would be able to negotiate a buy price from the publisher / distributor of (let's say) $58 per unit.

            GAME's big problem was having expensive retail sites and not being able to make enough margin on enough sales of new games in order to make a profit. They did their best to pilfer the pre-owned market but even that didn't make enough money. I can't see the same tricks working for EB.

            You're right about exclusives. I see that as the one thing that EB does offer, and I suppose does get right - but then how many people buy the exclusives? If you look at EBs website several of their exclusive collectors editions are at half price or less. They clearly were not able to sell out.

            Yes my comments are speculative, how could they be anything but. At the same time, it's just common sense.

            And yes I agree about millions of dollar losses being ignored is hard to believe - and i'm not a financial guy but that IS what happens. You want proof? Look at GAME.

            A lot of business out there lose money, year after year, and they're propped up by loans that will never be paid back.

            EB is likely propped up by its US parent company, that likely has extravagant tax avoidance practices, and likely will carry on doing exactly what it has always done up until the point that one day it goes pop and the party's over.

            You can look at EB and say that as a company it has value, It IS the no.1 gaming retailer in Australia. That's a good thing. But, you could look at EB and say that as a company it is working a tired business model that is utterly dependent on a buoyant and highly active retail gaming environment and that that hasn't existed for the last several years, as evidenced by the decline of GAME and GAME UK, and is facing huge challenges such as digital downloads, the rise of casual gaming and strong local competition from JB and online retailers.

            They won't last.

              Mark wrote a long article a while back that one of the main reasons GAME collapsed is that they were forced to buy product in quantities that they knew they could never sell. If EB's buying power is different, it's an entirely different business model.

              EB also clearly has relationships with the publishers, given the EB Expo. There's more to their business than selling games through a mall outlet. You can't just look at the shopfronts and assume from that, that they're equivalent to GAME.

              You might be right- they may not last. But it won't be simply because they do the same things as GAME. Because they're not.

              Last edited 17/04/13 2:40 pm

                "If EB's buying power is different, it's an entirely different business model."

                Wrong. Same business model, (slightly) different purchasing rates.

                "There's more to their business than selling games through a mall outlet. "

                Not much more.

                "You might be right- they may not last. But it won't be simply because they do the same things as GAME. Because they're not."

                Fundamentally they are doing the same. Yes, EB has the Expo, GAME had their silly date night thing. But, as you note, those are spin-offs of the core business functions - which is bricks and mortal retail.

              You're just so very, very wrong. Factually so. Just google a few things you've written and see if they're true.

              They aren't.

        You'd be surprised. I'm no expert, but I try to keep abreast of economic events. I can't find any explanation of how Sony is still operating as usual. They haven't generated profit in any division in years, the PS2 made them a lot of money which was eaten up by the other divisions, and technically no one should be giving them loans as they've been rated as unable to pay them back. They are probably salvageable with a massive restructure, but that would mean sizeable loses for their current investors.

        With regards to EB, I can't find any earnings data (according to ASIC they are not a disclosing entity), but the parent company made $400 million in total last year. This is a slight decrease in profit year on year, but at least they aren't in the red like GAME UK was.

          I don't suppose any of us here knows the US market that well. $400 million seems a lot for a company that is as hated as much as Gamestop is.

          GameStop must have been doing something right, and I guess that was maximising the pre-owned market.

          Is that success going to continue in the face of casual gaming, digital downloads, online retail? Maybe.

          What about if MS does introduce something stopping used games being played? Well it sure won't help GameSpot.

          My guess is that GameSpot will continue to be in decline and will start shedding loss making divisions. They may decide to support loss making decisions for several more years, or they may decide to do their jobs properly and start actioning things sooner. Either way, EBs days are numbered.

            I agree that EB as a retail outlet is foreseeably doomed, the real question is whether they can transform into something else in the time available.

    I really think their key to survival is collector editions of games, new releases, used games and merchandise. Which looks like what they’re pretty much doing anyway.

    Pricematch?
    Where they knowingly charge more for their product then rely on the consumer to do the legwork to find a cheaper price?
    7 day return policy means less when many games have a online registration for MP, or once off codes for activation etc.
    I'd rather go to JB's any day. The only customer service i need is someone to hand it over and then to provide the mandatory customer support if the product is faulty.
    I don't need some kid to ask me if i want disc-protection, user guide, carrots with trade in's or to pre-order something else.

    e.g. Penrith westfield having more than 1 EB and one of those has a JB next door....

    Also people won't buy pre loved games if they can walk next door and get it NEW for less.

      They closed or closing one down.

      They should stop harassing customers over preorders at the counter. Last few visits I spent a min saying no to every preorder suggestion.

      the EB next to JB closed a while back and merged with the smaller one.

        Wait, you mean there was one that wasn't the one next to JB? Huh.

      Not to mention those who CARE about the games industry avoid pre-owned games as it hurts developers but not providing accurate sales, not to mention a pre-owned game could be sold a few times, but the developer only sees 1 sale and only gets money of 1 game.

    *deleted due to replying to wrong comment*

    Last edited 17/04/13 1:44 pm

    We are currently in a situation where it's cheaper to order games from OzGameShop, situated on the OTHER side of the world then it is for me to drive the 5 minutes to my local EB....

    Like take for example three recent purchases

    Tomb Raider 360
    OzGameShop: $42.99 + $0 Delivery
    EB Games: $69

    Bioshock Infinite 360
    OzGameShop: $54.99 + $0 Delivery
    EB Games: $88

    Luigi's Mansion 2 3DS
    OzGameShop: $49.99 + $0 Delivery
    EB Games: $68

    Something is seriously wrong here.......

      Hmm... depends on how much you value the week or so shipping between purchase and getting to play the game - both the delay itself, and the effort required to avoid spoilers online in the interim. Some people consider $20 or $30 an acceptable loss in exchange for that peace of mind and immediate gratification. Most don't, I'd imagine, but clearly enough do to keep the retail game stores alive. For now.

        I get your point, but that's less and less of an issue. I got Bioshock Infinite for $38 from ozgameshop and was playing it at the same time as everyone else (when it unlocked on steam). But I agree with your general point: its not the online retailers that will kill EB, its downloads.

          Oh, definitely. One of the reasons I've started preferring to get games on Steam instead of Xbox or PS3 is because it's easier.

          But EB doesn't make their money on PC games - they lost that market with the rise of Steam, Origin, Desura, etc. They retain relevance by selling console titles, which can't be unlocked on purchase via a third party like most PC games can. Once consoles go digital in a viable way (PSN is getting there, but XBLM prices are still pure insanity), retail game stores will start disappearing as people start converting to digital. It's only a matter of time.

            PSN is so close to being a viable download only service. Only thing that puts me off is the lack of competition within the platform.

      What you're forgetting is that price discrepancy is an issue which effects the whole country, not just games. Local distributors charge Australian retailers ridiculous amounts to sell their products, and then that has to be passed on to the consumer.

      The only reason places like Big W or JB sell their games cheaper is because they offset their margin with other products in the store that they sell. Even so, JB have often priced their games absurdly high. Crysis 3 was $89 on release, and I'm fairly certain Black Ops II was about the same, possibly higher.

      Australia is expensive to live in. Just be grateful that we can import things for cheaper.

    All this talk about EB always remind me of that one episode of South Park with Walmart.

    I hadn't been to EB for years.... so I went to the local EB and bought a new copy of Ni No Kuni and when I got home, I saw that there was a sticker stuck on the face of the game-dvd...

    I went to buy a new copy for $69 and I get it looking like a 2nd hand game... online I can get it for around $40 brand new and sealed.

    yeah...

    Some of their sales are ok, and if they don't get too jerky about price matching then they are a convenient way to buy a bunch of stuff at once (like when there's a console launch) then get the cheapest deal by pricematching bits and pieces at various other places.

    They're becoming less and less relevant now though, especially with PC games. It's much cheaper to buy a steam code from overseas and most of my console disc games are all from ozgameshop now.

    It's a declining business.

    Apart from the best of the best locations I would expect them to slowly move online and shut down stores as the leases expire. It's not a business where there's any benefit to customers from seeing and touching the goods in person before buying (like with clothes or food).

    Maybe if there were more aggressive about allowing people the opportunity to demo games in the store before they buy (double-edged sword, of course, but at least it's a reason for people to go to the physical store).

    I'm not a supporter of EB games. My biggest gripe is the pre-owned game market and how EB uses it to make profit for themselves, but none of those profits will make it back to the games developer which is who I really want to support when buying games. And if I choose not to purchase pre-owned games in an EB store then I'll be paying more than most other "non specialist" stores like Big W or JB Hifi.

    If EB are interested in staying in business I think they should be looking at offering more than just price matching games, they should be making gamers WANT to come to their store and not go to JB hifi or Big W. Why don't they promote local gaming events (or create some!) and genuinely create and atmosphere where up-selling and cross-selling isn't present but instead replaced with a feeling of being welcome, almost like being somewhere you belong, opposed to the gauntlet of advertising, pushy sales and staff who don't know much about what they have in store.

    /rant.

      I tend to think that trade-ins do flow to developers, because it allows gamers to take more risks and they ultimately spend the trade in value on other new releases.

    if they want to stay competitive, they will probably need to downsize. their seems to be a bunch of stores out there - hard to see how all of them make their sales targets.
    they have an online store now - maybe they should focus on that? cheaper online vs storefronts? would savings be passed on to the customer? doubt it with current way its set up.

    I think something like 75% of their profits come from used game sales, the move to digital distibution,online passes and potential of blocked used games is eating away at them and has the potential to bankrupt them overnight.
    Their living on borrowed time.

    I use my brain.

    I research games before buying so I have a decent idea of it's quality. I then logon to one of the many overseas online stores and make a purchase saving anywhere from 30 - 60% off local retail prices. This includes courier shipping/express postage, or at the very least registered post. If you have an issue with waiting you must clearly have the mindset of a 14 year old. You can also purchase your precious collectors editions online for half the price. You can also purchase prepaid PSN or XBL cards for the relevant region and thus missing out on DLC is not even an excuse.

    There is simply no reason to buy locally and support an industry composed solely of rip off merchants. If you pay $100 - $115 for a game, quite frankly, you're an idiot. You're also paying GST which goes towards supporting the governments laughable "classification"system, in spite of an R rating, the mere premise of dictating adults to begin with is not something I want to support.

    Mums and dads, granny's and impatient mainstreamers are the only people I can see buying from EB or any other local store. Small Independent stores are the exemption in some cases, but again you're still paying GST to an incompetent government.

    I hope EB does go the way of the Dodo. They don't deserve to be in business.

    If I was running a EB store I would clear all the inventory out and put a box on a stand with a question mark on it and fixed light making it glow. People will come in and wonder what the hell...and approach the box...then I'll rob them.

      That box works alot harder than their staff, And probbably has a bigger knowledge of gaming too!

    Retail is dying is what it comes down to, And the company's with poor managment and marketing are the first to go. EB games is currently on the chopping board. Nothing positive is to come from this business in the future.Bye Bye EB, I don't think anyone will miss you.

    Retail stores just like Internet stores come and go, they change hands and they have larger competition, buying online often means you have no sale protection, from faults or poor purchases, it is extremely good practice to have a return policy as it generates return customers, those that just chase bargains are not who the stores are set up for, Bargain hunters care only about the $, customers care about knowing the staff will treat them right and give them the right advice and product support, EB Games does this (for the most part) work inside thier company policies and you will find it hard to find a better store.
    go online and you are not important to them, they take the money and ship the product, and do not care if you get it in one piece or not, especially if they are from outside your country of residence,
    game also offered excellence in support and service, but with this lazy attitude of "I wont go to the local store I will have the mail deliver it from the cheaper imports" means you are supporting someone else's economy, and the money you spend is not going back into the local economy and that drives prices up.
    so when you cannot afford to buy the new Playstation because it is on the shelves at BigW for $800 more than what you can import it for from China,
    you only have yourselves to blame.
    supporting local business, returning to the store for in house discounts has a lot more effect than costing you $5 more + bus money to go to the store.
    I would much rather have Boxed Products collected from the store, and returnable when not what I ordered (Consumer Laws) than to get stuck with a imported product I cannot return because its not covered under our Australian Consumer protection policies.

    True!

    But it depends on the CE. The CE you grab depends on the region and shop. Once upon a time US region CE's were the only one's worth grabbing (not counting Jp.... only coz their market is heaven for CE and trinkets =P) but these days EU/AU versions can give NA CE's a run for their money.

    After having a very unpleasant experience with EB games with the release of the Gamecube I have absolutely no sympathy for their survival.

    Is that the rockdale EB? *shifty eyes*

      No, it was on the Central Coast.

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