Gametraders' Managing Director Comments On 'Grey Imports'

We've spoken to the Managing Director of Gametraders before, in our extensive pre-owned feature, but we were surprised to see him comment yesterday on our Gametraders Selling Ocarina Of Time Early, informing us of his reasons for buying video game stock overseas and selling Ocarina of Time before its scheduled release date.

His first comment was a simple one.

Hi Everyone,

The logic behind selling this game early is that our stores take exception when publishers do exclusive deals with major corporations but they won’t offer the same deal to us, an an Australian owned company.

Mark Langford Managing Director Gametraders

Then after some further debate, he went into more detail.

Hi all, me again, I have tried to keep it as brief as possible without writing an essay.

10 years ago when I started GT there were over 150 independent games shops run by people who love the industry, today you can count them on one hand.

Today games are often used by the big department stores as loss leaders, they don’t care about games and they get deals that we cannot get so we import some titles which allow us to complete with them because you can’t pay your rent and wages selling games at cost price or on small margins especially when the rents are over $200,000 pa in some centers.

All games sold in Australia are imported and they all come from the same factories, importing direct allow us to cut out the middleman and allow us to compete. We are fully compliant with Australian law which encourages parallel importing plus we place the rating sticker on every game . It’s a case of adapt or die.

Generally we don’t break street dates unless a competitor has a deal (normally provided by the publishers) that gives them a competitive advantage. For the record our competitors have broken street dates plenty of times.

The big department stores in particular pay about a 1/4 of the rent than we do and they mostly don’t provide the same staffing levels.

Our franchise owners work extremely hard and have put everything on the line so we will do whatever it takes to compete.

Cheers Mark Langford

Some interesting points. At Game-Tech this week, Ed Fong, the Managing Director at Ubisoft discussed the ways in which retailers and publishers should be working together, but does this scenario work for smaller independent stores who can't afford to buy stock in bulk like the larger retailers?

It's a difficult question, and it appears as though Mark Langford and Gametraders are simply attempting to find the best way forward for their own business as a whole.


Comments

    Kudos GameTraders, I wish more companies would follow your tactics.

    Very interesting. I do absolutely love how Gametraders give us the choice of import copies.

    I wonder though. Is it reasons like this that Nintendo decided to start putting region lockouts on their handheld consoles...?

      That's more that they're being greedy bastards

    I grabbed Ocarina Of Time yesterday from Gametraders Chadstone and I am loving it. If Nintendo Australia, or whoever decides to release games weeks (if not months) from when they are released elsewhere in the world, I hope Gametraders keeps doing this. They have definitely won themselves a new customer.

    I actually agree with the guy, i really see what he's saying.

    He has to stay competitive, it's as simple as that.

    good on GT for sticking it to the publishers. retail is suffering in oz because the publishers have decided our territory needs to be overcharged both on wholesale and retail pricing.

    this leads to awesome indie stores being swallowed by the supermarket style stores and this will lead to prices rising as the bigger super stores gain control over the marketplace.

    keep importing GT and lead the way for other retailers to import their stock to their bricks and mortar stores. ozgameshop.com is another example of the fact that publishers need to wake up and see that this territory may be small in global standards but it very important to those involved in it - including the gamers.

    I 100% love GameTraders for stuff like this. Australia in general seems to get screwed on release dates and such. But when a company offers deals to many businesses and not to our Australian owned GameTraders, what do you expect them to do? Just sit around while people flood to EB to pre-order for all the bonus goodies? Sitting around letting that happen would put a lot of company's out of business. So good on them for importing and gaining the competitive edge.

    So whilst they admit that bigger stores are making a loss, they import the games at less than half of what other stores are paying at cost price - including the indies, and charge the full Australian RRP to gamers who are desperate to get the game first. That's exploitation of the 'hardcore' gamers that they target.
    It's fair enough that they are looking for a competitive advantage with street date, but at least adjust your prices accordingly.

      You're obviously not a returning GameTraders customer. My local store offers pre-order discounts on titles (10% the cost of of the game), and almost always offers titles for $10 less than competitors at all times. And if competitors are cheaper, they pricematch.

        Obviously not a returning customer. If it were not for gametraders I wouldn't have half the stuff I have now.
        I get a discount on almost everything I buy. I don't only get 10% off but a bit more. It depends on how much you spend there. The more you spend the bigger the discount. Or at least that's how my local GT works.
        Did I mention they imported a Japanese game for me? I couldn't get it online, but they could. ^^
        Also, Kmart imports games. I have found quite a few American games there, including Rune Factory 2.

          My local GT store in canberra, has a couple of really good staff that know many of their customers by first name and remember them all the time, know what they like, give them discounts, and give them the right service. i have found from eb that the staff theere are just check out chicks that think they are rock stars.

      I mostly see slightly cheaper prices, but then I'm usually looking at slightly older PC games anyway (older like a couple of years, not the relics of the past which represent great bang for buck if you can be bothered getting them to work on new systems).

      Pricing aside, GT will stock titles that aren't available over here through the regular distribution channels - things like the Arkham Asylum and Modern Warfare GOTY editions with the extra DLC, or Transformers: War for Cybertron - only available for consoles in any of the big retailers.

      wake up to your self mate, ocarina of time is only 5 bucks cheaper to get in from the UK compared to local. have a look forself and wake up

    The phrase adapt or die is apt, Nintendo can't keep delaying there games weeks, months later or we'll just import.

    Region locking only blocks the US, the UK is a wide open market.

      just to show you how much the game world cares bout australia is we are classed as europe to them. ever buy a playstaion game with Sony Computer Entertainment Australia on it, no it says Europe..

    I love this guy. Good on him, and good on Gametraders. I've always been happy buying from them, and will probably buy more from them after this.

    Um , excuse me.

    "All games sold in Australia are imported and they all come from the same factories"

    Go look at the backs of games. EA , Activision , Ubisoft , Sega , THQ , Take 2 , Lucas are almost all Australian produced.

    "All games sold in Australia are imported and they all come from the same factories"

    Umm, on the back of some of my PS3 games it says "Manufactured in Australia" or does he mean Nintendo games? Or am I missing something?

      Nope , it is all major platforms. PC , PS3 , Xbox ,Wii , DS , 3DS , PSP all have local manufacture , and most major publishers are using them. It is the smaller titles that are imported.

        So that is to say his comment is wrong? So he is lying?

          I dont think he is lying , perhaps just not completely informed or just an off the cuff remark.

    I really, really, -really- wish other, bigger names in gaming retail would follow suit and say "F@ck this" to Nintendo/2K/etc.

    EB gets business from me on two occasions: When I don't want to have the hassle of going to get it from the shop(bound to public transport), and the odd occasion I there's a pre-order bonus I want(which is the case for zelda).

    I already get my consoles, not-just-released games and general nerdery stuff from GT, and as soon as they cater to my delivery need, they're set. I've no idea on the logistics of it, but I imagine it wouldn't be overly hard for the stores to package the games into parcels and ship 'em off a day or two early. Price on the other hand, could be an issue.

    I used to work for a hardware store... to prevent getting slaughtered by Bunnings they contacted each independant hardware store in each state and sorted collective ordering from suppliers.

      Doesn't that count as colluding?

        No, they didn't set prices... they worked together to leverage their buying power.

        It's called a buying group and most franchises operate this way.. In fact gametraders probably already is - retravision is another example..

        Even as a group though their collective power is nothing compared to the eb and department stores.

    Thats all fine and well, but the reason street dates exist is so ALL retail outlets have the opportunity to sell the game on the SAME day. That way they have EQUAL OPPORTUNITY to sell the game.

    I agree that the big guys like BIG W and JBs have the upperhand by being able to sell the game below cost. For example with the big toy sales on, one of the department stores is selling Zelda for $12 below cost price, making it impossible for stores like GAME to price match, as their policy is they cannot price match below cost (which makes sense because why sell something at a loss). The big guys do this because they don't want you in their stores to purchase games. Department stores lure you in with great game prices, but they want you there to buy other stuff like clothes and electrical. JBs want you to come in for the cheap game and then look at new TVs.

    EB took a bit of initiative with Zelda and secured a pre-order bonus with their game. This bonus item wasn't even supplied by Nintendo or a publisher. They organised the prodution of the item themelves. And it was a great idea too. I work in games retail and can get Zelda at an awesome staff discount, but I pre-ordered at EB for the bonus.

    So yeah stores can adapt and do whatever they can to get a slice of the pie, but there is more than one way to do it.

    Many stores have broken street dates before, but Gamertraders is the only one that uses it as a business model.

      Really in general I was under the opinion they exist for big titles like la noire because a week starts on Thursday and they want to set sales records for the first week and not have a portion of their sales occuring the day before and limiting their chances

      Phew! I'm really glad you posted what you did. You pretty much took the words out of my mouth. I couldn't agree with you more. I guess some people, myself included, were a bit harsh on Game Traders...but I guess I can sympathize with what Mark was saying...especially considering I wasn't even close when I "thought" he was breaking agreements.

      Like you said, the only real issue is the set release date...which..really isn't THAT big of a deal.

    It's always funny to watch the big dept stores sell at under cost price but they have cut off points. They'll only supply very limited quantities into their store so they won't loose too much money and they'll get you into their store to buy an everyday item like a pair of socks that they've marked up from 10c cost to $5 sell price.

    My opinion you should be taking revenge at the big dept stores for price gouging customers on everyday items as this is where your cost of living is really increasing.

    If GT are trying to keep their business model afloat then good on them.

    These comments also raises the question... Why is importing games a cheaper alternative than supporting the local production industry who produce the games on our own soil?

      Wage rates and good exchange at present.

      With current exchange rates the average Aussie worker gets double the pay what they do in Europe or the US.

      So when the game is manufactured the workers are paid double.
      When the courier picks it up to take it to distribution , the workers are paid double.
      When it is at the distributor , their workers are paid double to distribute it.
      When it is couriered to retail , that courier is paid double.
      When it is in the retail store , the person selling it to you is paid double what they are in the states.

      Thus the prices here are higher.

      Minimum wage and cost of living.

      It's the reason our tech costs so cheap. And before people whine, take a step back and realise that computers are cheaper, more powerful, portable than ever.

      We pay these low prices, because someone else less fortunate is willing to be paid less than we are. Foxconn would not be able to produce the quantity of electronics they're able to and at that price, if they were located in Australia and had to pay 20,000 Aussie workers even a minimum wage. Your underage MacDonald's temp here gets paid more than a foreman in Shenzhen. This is reflected in varied cost of living.

    Well i dont have an gametraders near by :(

    well we pay extra because of those dam distributors and the fact that we have the rating placed on and gst.

    How about instead, f the distributors, and source the games from the UK distributors and stick the label on, add 10% for gst, about 10 dollars for profit and bam you have an game that would cost less than 70 dollars.

    If the Australian retailers can drop the RRP to 80 dollars then more people will buy games and i would stop importing games. and pay the bit extra.

    Thanks to all of you with your positive feedback.

    Succeeding in business is challenging at the best of times but since the GFC things has gotten even more competitive. We are subjected to intense competition and that is why we have to import some titles direct to allow us to compete and give our stores better margins which we have managed to achieve over the last two years.

    We will also sell some games early if we see an unfair competitive advantage especially when a publisher gives our competitors a deal that it is available to us. We are not the only ones that sell early on occasions, street dates are broken all the time by our competitors.

    I noted a couple of very cynical comments on the other thread, all I can say is that people should have the facts right before they make incorrect assumptions.

    Regards

    Mark Langford
    Gametraders

      Will you be offering a delivery service or Webstore in the future ?

      You should advertise that you have import games, and people can order import games from GT. Lots of people want games early, and most people don't mind if they have a different region copy. Sometimes the box art is better from other regions.

      If the import price is competitive, people would probably go out of their way to visit a GT store, especially if they knew they would get the game early.

      So Game traders is put in an unfair position by not being offered the same deal as other retails, so they break street date putting other retailers in an unfair position. So EB decide to sell the game early too putting other retailers in unfair positions...

      I agree that it's not right, but there should be other ways.

      They are cynical because they are true. You are painting a rosy picture for publicity. You are lucky that customers love the gametraders stores and this is because of your franchisee's. Stop screwing over your store owners with low margins. As a current franchisee along with many more in the group, we know you are doing the wrong thing by buying for dirt cheap and selling to stores for high margin and restricting the stores from buying from the same supply line you use. Australia needs to know how you run the show and we will be happy to show the inside workings of it if need be.

    I used to import US game for DS from gamemania, well before they came out here. They are long gone now.

    This would be great if they stopped shutting down Gametraders in Perth.

    The Carousel/Cannington one closed last year, and now the Perth CBD one has closed. I used to love going in there are looking through the older stock for interesting items. Now it'd be a 20km drive or so, which just is not worth it.

    Good on you Gametraders, sticking it to Nintendo, EB and GAME!

    I'm gonna start buying more from GT, I know some people that work there too.

    I've been buying games for over 15 years and I never just thought of how these deals come about or who gives / gets exclusive rights to pre-orders. Thanx for posting this Mark, this was surprisingly insightful.

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