JB Hi-Fi: 'More Competitive Pricing To Drive Growth' In Games Throughout 2012/2013

JB Hi-Fi has released its end of financial year report, and commented on the numerous issues retail has faced over the last 12 months, along with what the company expects from the next financial year. The plan for the games division? Capitalise on store closures from "competitors" and push in "more competitive local pricing".

JB Hi-Fi had a strong year overall with a sales growth of 7% in a notoriously difficult retail market, but their software division — which includes video games — is down 2.9%. And if you adjust for the fact JB Hi-Fi has opened a number of new stores, and run the numbers on a comparable store basis, the number is a slightly worse loss of 9.3%.

It's worth noting that FY2012 was a difficult year for all retailers, specifically in video games, with GAME going into liquidation and closing all stores. These store closures are thought to be a good thing in the long term, but JB Hi-Fi believes it may have been problematic in the short term.

"While [store closure from competitors are] a long term benefit," said the report, "there is a potential for further short term impact to gross margin as they clear stock."

It seems that GAME's massive clearance sales may have impacted on JB Hi-Fi's numbers, at least in some small way.

JB is expecting big things from the 3DS XL and Wii U this financial year, but expects that "more competitive local pricing" will also drive growth, and hopes to mitigate the initial loss with increased stock. The report also briefly alluded to its decision to bring parallel imports into Australia in order to counter negativity over overpriced goods.

JB Hi-Fi also expects to open 16 new stores in the coming financial year.


Comments

    I think their competitive pricing by parallel importing titles will help them a bit if they can win back a chunk of the market they lost to imports over the last couple of years, but I don't think the 3DS is going to be as big a draw card as they think. The Wii U will boost overall sales at launch like any new console would but I still don't have a lot of confidence in Wii U being a hit so I don't know how that's going to work out in the long term.

    The fact that they've experienced an overall growth of 7% surprises me, considering how much of their range is music. I mean if they're having negative growth in games sales thanks to importing and digital titles, it feels like digital distribution of music should have all but killed the retail sector by now. I saw a Sanity store this weekend and felt like I'd stepped through a portal to 1998.

      I thought the Vita was going to be a hit but look how wrong I was.

      Unless the WiiU gets some new games announced soon, I don't think it'll do particularly well.

        All Wii U needs to do to be a hit is to do a few mario games and a smash bros game and it will be a huge hit just like the Wii did don't forget the handheld market is alot more fluctuate than the console market.

          Speaking as someone that worked in a game store for years... the only reason the Wii did well in Australia was its price, Wii Fit and product placement of wii sports in media. 3/4 of people that bought Wii consoles didn't buy any other games. Wii U will be a tremendous failure if it costs more than $350~.

            But the wii was $399 until recently...

            How does that work

              No it wasn't, top dollar was in the $299's or less surely. I know i didnt pay that much, and i wouldnt unless it came with a life size bumble suit and a friend that would actually play the damn thing with me

                It was $399 when it was first released iirc, but back then, the wiimote was mystifying and pulled in the mere mortals with ease.

        You were the only one :D

      You'd think so, however I recent'y wanted to buy a new album (Tim Freedman's latest) and my digital options (iTunes and Bigpond Music) were double the price of what it cost to buy the actual CD from JB. A few overseas digital MP3 sellers came in cheaper than the CD, but were region locked to prevent me from purchasing. So yeah, we're not in the future yet. :)

      JB has the best music collection, only place you can actually find new metal cd's

    Lower prices? I guess JB HiFi wants to be a even better price match yardstick for EB Games.

      eventually people will stop going to EB if they can save the fuss of price matching.

      And eventually EB will notice everything is price matched.

    JBs like $30 cheaper on every game already lol, cant believe anyone buys games elsewhere

      They're definitely my shopfront of choice... but EB always gets me once a year with their sexy Assassin's Creed collectors edition :/

    I have noticed recently that most new releases at JB are $69 or less. I got Spec Ops and Spider-Man for $69 when they released. Borderlands 2 and Transformers are both releasing at $69 as well. Hopefully the trend continues. Would be nice to be able to pick up a standard copy of Halo 4 for $69 when it releases in November!

      I think you'll be fine in that regard - Microsoft tends to price the games they publish slightly less than most of the other publishers ($10 cheaper on most AAA titles) here in Australia.

      Yeah, I was surprised when I went to preorder borderlands and they said it was $70, and could possibly be lower by release. My jaw nearly dropped.

    It's not just about price matching or having the lower prices is an issue. It's also that there aren't any great new releases that make people want to go out and buy. Plus you have Steam as well which has the game earlier sometimes or just more convenient or cheaper. Activision had a sulk because MW3 didn't do as well as Black Ops in terms of sales because now the games are pretty much the same and they don't see a reason why to buy it. And it's hard on developers because they may spend a tonne of money in building/creating a game and the sales are bad so it sends them broke or they get bought out. The only company I can see getting money is Capcom. They re-release release release Street Fighter games all the time and they sell. Lol. I know because I'm one of those suckers that buy them.

    Interesting that they think WiiU is going to boost sales, hopefully they'll be able to pull a better deal than EB. The only reason I went to EB for Borderlands 2 was the massive set of awesome stuff that comes with it. I think this is their biggest problem, sure they have low prices, but sometimes you can't compete with awesome stuff with low prices. Call me a heathen but that's what EB does right, they negotiate something exclusive and cool because of their GameStop connection in the US

      I think their problem when it comes to the enthusiast market (which I'd expect most of Kotaku AU's readership is) is that we're far too clued up. If we're really into a certain game, we want it immediately and with as much cool swag included as possible, and price is a secondary concern. For the games we're less interested in, however, we'll just grab the best bargain out there. So for big collector's editions, EB Games gets more of a look due to the exclusives they tend to have, whereas for everything else we're as likely to buy online and save a few bucks, because online pricing is still cheaper than JB most of the time.

        I agree with the this audience being very clued up, we do want all the cool stuff. But I think with console launches, something that this article makes JB out to be looking forward to, the general public will try and look for the best deal/bonuses. Parents will look around for the best price but kids, specifically with the WiiU, will look at the posters as they walk past and tell their parents what bonus stuff, if any, they want. It's pretty much the reason that those giant posters exist, to draw attention to te best deal.
        Specifically in large shopping centres, it's not difficult to, and I've seen most people, walk down and check out the best deal, which is where these retail stores tend to be located. But different strokes for different folks I suppose.
        I could be entirely wrong but I think gamers, in general, know what they want and those that don't will likely just go to EB since it's a game store and JB is not.

      This is not always the case. Check out Halo 4's pre order bonus for instance, the JB option is far more appealing then what you get for pre ording at EB games.

    'overpriced goods' oh ho ho. Don't you mean 'differently price goods' for our region Mark? ;)

      They've ecumenically rightsized their merchandise for the Asia-Pacific region, in accordance with the consumer price index and taxonomical disincentivization that has been completely fabricated..

        Way to take it up a notch! Good job!

    JB have driven the prices to a point where I don’t feel completely ripped off when purchasing games at a bricks & mortar store. For a period there, I was only importing games from Play-Asia, they are still cheaper but we’re slowly starting to get to a point where I am comfortable to support local retailers.

    has been a couple weeks (2-3) since i've been to JB-HIFI in traralgon but i wasn't seeing much in terms of game pricing over there, unless its just a new thing. still seeing new games going for $90+

      Not to be 'that' guy, but that would likely come from the increased transport costs being so far out. It might be cheaper for you to catch a train to Melbourne and pick up a few titles.
      JB has been keeping costs pretty low for a far while now, surprising that it hasn't translated to rural stores though

    JB are awesome there in-store prices are great. Can't see them getting much cheaper though they have to make some profit.

      lol im pretty sure they are quite profitable. lol

    Loss prevention officer always ball gazes me on entry and exit of jb

      "If you tell me where you got your fake ID I will ignore the ice cream sandwiches concealed in your armpits"

    Since I refuse to shop at EB Games, my regular shelf-perusal has, as of late, being JB and only JB.
    They're cheap, you're left alone, and if you know what you're looking for it's an absolute cinch to find stuff.
    Hats off to JB, they're doing a bang-up job.

      Also, they occasionally have folks trying to be funny with their custom yellow description/recommendation cards.

      And if you're not left alone, the customer service is excellent - generally just "what are you looking for? it might have been moved if its on sale etc"

    I only shop at EB during financial year sales :)

    If I buy a physical copy of a game, which only happens for console stuff now, everything else is digital. Bandwidth caps in AU are starting to get to the point where you can download a pile of games a month, if you're with bigpond or internode their steam servers are umetered for their ISP customers. Why would I pay the australia tax unless I have to? Oh yeah and I won't buy a game on steam until it's fairly priced for australian accounts. If it ain't bi-annual sales ain't ever that far away.

    $60-65 day 1 prices and not censored, I'll probably always buy from JB. Sales by volume is the best way to build a market. A few of us bought skyrim for $63 last year.

      Yeah, $69 for sleeping dogs and darksiders which come out thursday is pretty damn good. Sleeping dogs is just $8 more than OZGS and you don't have to wait. But JB also have some crap pricing, e.g. NHL 13 and NFL 13 for $89 each. Not so great...

        This. I'll be grabbing Madden and 2K from OGS. At $70, I'd buy from JB.

        Make me buy from you, JB.

          keep an eye out at launch, although they have announced $69 on a ton of games still a month or two out hopefully they will change madden and 2k closer to launch.

        $69 for Sleeping Dogs at JB got me to order there.

        They keep doing those kind of local prices and I'll shop there more often.

    On that last bit about opening new stores, one of them is where I live and supposedly in a 20 storey complex that hasn't even been approved for build yet. So take that number with a grain of salt.

    I'm a PC gamer and what is retail stores?

    I BOUGHT MORE FROM JBHIFI THIS YEAR - ENOUGH SAID

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