PS4 And Xbox One Fail To Lift JB Hi-Fi's Crappy Software Sales

At the tail-end of last year, Sony and Microsoft released their first major consoles in more than five years. It was kind of a big deal, with multi-million dollar advertising campaigns, relentless media coverage and a strategic launch date aimed to capitalise on the Christmas shopping frenzy. You'd therefore expect these months to create a significant boost to JB Hi-Fi's software sales. Except they didn't. In fact, sales went in the opposite direction.

CD picture from Shutterstock

In its latest half year results presentation, JB Hi-Fi reported an 11.9 per cent drop in software sales compared to the same period in 2012. That's a pretty woeful showing when you consider that this was the first time gamers had a chance to snap up Xbox One and PS4 titles.

Now admittedly, JB Hi-Fi does lump games, DVDs and music into a single 'software' category, which goes some way to explaining the sharp drop in sales. Nonetheless, you'd think that the pre-Christmas launch of the Xbox One and PS4 would have helped to stem the tide somewhat. (Video game sales routinely trounce all other forms of entertainment, after all.) It seems odd that the combined software sales for two brand-spanking new consoles failed to improve profits over the previous financial year.

Then again, the current crop of next-gen video games haven't exactly set the world on fire in terms of hype or critical acclaim. Perhaps we're all just biding our time until something decent comes out. If you're interested, you can check out the rest of JB Hi-Fi's financial results here.

A 11.9 per cent drop in software sales sure does sound a bit crappy. Could the balance finally be shifting towards digital media as more consumers go digital? Is piracy to blame? Or has the quality of software just been a bit crap this year? Share your thoughts in the comments section below, me hearties!

JB Hi-Fi Limited Half Year Results Presentation [ASX]


Comments

    Maybe it's because we can't pay our BS rent and internet amount as well as a new console and games that costs twice as much.

    Last edited 03/02/14 5:19 pm

      I think everyone's gotten pretty savvy with finding out ways to avoid the Australia tax by now.
      Console peoples are importing their games, and PC are using the multitude of sales and reseller sites.

        So that percentage loss is from overseas sellers?

          It's still cheaper to buy games OS, but the margins are shrinking with the dollar dropping so much. Personally, I don't really bother that much anymore, it's not worth the few weeks it takes to get here to save $5-10.

            when its $90 - $120 in Australian stores and $60- $70 overseas regardless of what the dollar is today, the difference is outrageous.

              I just renewed my my gold account with a email code from ozgameshop for $55.

              why would I want to $80 from jb?

              and while I was there I pre-ordered thief.

              that's about $50 in savings.

              Last edited 03/02/14 6:24 pm

          No, the percentage loss is from Australians getting ever more tired of inflated software prices.

    Or
    We are just starting out with new generation of consoles. As a result very few titles initially while they are being developed.

    There's barely any PS4 consoles in Australia to buy! So its plainly obvious as to why there were hardly any software sales (that & crappy launch titles)

      There's none, same goes for Xbox One... Only way to get either currently is to have a pre order at JB, EB etc.. We got about 5% of the manufactured PS4 stock in the initial release, it was a joke. So much so my local EB could only fill about 50 pre orders, on launch.

      There's still people waiting from December to get a PS4, I was lucky to even get mine in January, since in theory I missed the cut off for the January shipment.. Sony are just being giant dicks it seems. Microsoft are almost as bad given after February's shipment of Xbox One's EB is not going to be seeing any until about June at the earliest. Not sure about JB, but I would assume they're in a similar boat.

      But yeah, the lack of games is annoying, Sony & Microsoft should've pushed for more stuff to be released by now but you get that.

        get a real jawb, hippy! *shakes fist*

          Hey, not my fault the fuckers have no hours for me! :P

        I walked into a JB HI FI on Saturday and 'bought' a PS4 with the trade in value of about 80% of the games I had collected over this 8 year generation. Didn't have to wait at all, didn't have anything pre-ordered. I was told a lot of people have placed pre-orders, but not collected. It may be worth asking someone working there if they can work it out for you?

        That said, this was a friend who secured it for us...

        Last edited 04/02/14 1:49 am

          While there are a lot of stores totally and ridiculously sold out, there are also others without enough pre orders getting more consoles than expected. If you hunt around you can find them, but it's not as simple as walking into your local most of the time.

            Well yeah the flip-side of that is while I could get a PS4 (somehow), Assassin's Creed IV, pretty much the only game worth buying on PS4 right now, is completely sold out in WA JB stores.

            The only reason why I got one now at all is that I was using all the trade in rebate to buy one, and didn't want to wait to see the game values drop any lower. This generation has a real games problem.

            The irony is in trying to reduce the risk of their titles by not making them next-gen exclusives, they are crippling their new generation before it's even gained any kind of momentum. But then again, that's not a surprise, the suits and shareholders these days can only see the short game.

              Unfortunately for the PS4, I'm pretty sure digital sales are still a rip off for AU customers, and their region locking of accounts from last gen is still the same. Xbox dropped their region locking this gen, so you can purchase from the US XBL store with your AU account without too much stuffing around for about $20 cheaper usually from the AU store.

                Yeah the digital prices are actually MORE than the physical ones. Which makes less than zero sense. Oz Game Shop had Assassin's Creed IV for something like $60 though so I dodged that bullet.

                What bugs me more about the store right now is how barren it is. It seems so stupid that they would completely abandon the wealth of content on the PS3 version of the store for PS4. God knows it could use some of those games right now.

                  That's what happens when they both completely change architecture however. Hell though, even the PS3's backwards compatibility sucked and they ditched it entirely within a year. On the one hand, you'll get streaming PS3 games on the PS4 eventually, downside being you'll have to pay for them again.

          I'm not sure how JB works with pre orders but with us at EB, if no one wants to pick up their pre order console (this only happens currently due to short supply) and we have no one else eligible for a console we have to send them back to head office to be redistributed, we're not allowed to sell them to walk-ins sadly. I'd much rather do that and get the stores budget up for the day since console sales are usually a great sale. I remember with the Xbox One, how many people wanted 4 games another controller & a play and charge kit, looked great for us staff making the transaction.

      Crap launch titles you say? Therefore the PS4 is a flop and time for Sony to shut down and pull out of the console market.

      {Sarcasm}

    Well there's multiple things at play here.
    The user base is small right now.
    Every retail game is now available to download day 1 from PSN.
    Buying a muti platform game on ps4/xbone is more expensive then buying it for ps3/360.
    Ozgameshop, Playasia and other popular ebay stores with better prices.
    Not exactly a plethora of killer games to buy at the moment.

    Last edited 03/02/14 5:50 pm

    You’d therefore expect these months to create a significant boost to JB Hi-Fi’s software sales. Except they didn’t. In fact, sales went in the opposite direction.

    It comes as no surprise. Buy the console locally so one has easier access to the warranty. Then buy the games online (primarily via Oz Game Shop) so one gets the software at an acceptable price.

    They wouldn't even price match BigW, sorry but the only game I bought from them was DR3 with controller and plug and play kit for $140

    - Stats dumped with a dying DVD format.
    - No games on new consoles.
    - No game sales on existing consoles.
    - Really, no sales. Big W and Target had better prices than JB for launch PS4/Xbone games.

    $95 is the current price for next gen titles at JBs, with the exception of Tomb Raider DE & Angry Birds. Just because you're hurting it doesn't mean you can stick it to the consumer in the ass...

      Oh wow a whole 7 dollars more at JB for next gen titles on PS4 (what I could be bothered looking at) than what they're currently going for at Big W. For the most part Big W, Target & Kmart sell their new release games for less than what they're paying for them from the distributor because they're willing to make a loss on something they don't sell much of and they make up the loss in everything else they sell from clothes to home wares.

      Considering they pay the Distributer roughly $90 or more a game they are hardly shafting us that bad.

      But always consider the old run around we're given, Distributors are charging the high prices so us poor Retailers have to bow to them. We can't provide online games at reduced cost because us poor distributors have to bow to the Retailers .

      Now consider Ozgameshop who get Australian stock via a UK Distributor and can charge less than Aussie Distributors charge Retail there is a flaw in the system. And that Flaw is the Distributors, Retailers can't go to another Distributor because they won't step on somebody else's territory.

      That's before you factor in rent,

        Youre naive to thing JB is being charged $90 per piece of software from a distributor who they order ten of thousands of units from

        Sure, Mum and Dad stores who buy 5 copies will be charged $90 per unit, but JB certain isnt getting that price.

    If the picture is any indication of how they store their discs, I'm not surprised people aren't buying them

    Does not surprise me one bit. Over the past year or 2 they stopped being competitive in pricing their games and so I expect that lost them a few quite a few sales.

    Plus price matching there is a real hassle now, First i need to show them proof that its on sale at Big W/Target then they need to call to check that a competitive store near by actually have it in stock. I actually bought my first game in a long time from EB as they painlessly matched the price and i was done in no time.

    Last edited 03/02/14 6:22 pm

      ^This is my biggest issue. I used to buy everything from JB as EB was way too overpriced but now the prices are about the same anyway.
      As for price-matching, When Pokemon X/Y was released I saw that Big W had it really cheap but I'd already pre-ordered from EB so I didn't worry about it, then EB staff dropped the price of my pre-order anyway without me asking for it. JB always give me the same run-around you mentioned.
      I still buy DVD/Blu-ray stuff from JB when they have their usual sales but even then I've found lately I need to return just under half the stuff I get (broken cases, scratched discs, etc)

      Someone working at my EB store let me in on a secret for at least their store. If the "price match" isn't more then 10 bucks off, just accept it.

      Isn't it just reasonable to ask someone for proof? Go where it's easier but i'm not sure merely asking for proof and stock is unreasonable... Anyone could just say anything... Why don't more people think that's reasonable?!

        I think asking for proof of the price is reasonable, I've never liked the idea of checking for local stock though. Just because (for example) local Big W doesn't have stock, doesn't mean I'm suddenly going to pay the inflated JB price...I'll just drive to another Big W, buy online or even get it price-matched somewhere else :P

        This. I work for Dan Murphy's and we need proof of somewhere else being cheaper, most of the time people oblige then there's those few who are obviously making shit up to get a cheaper price who argue it's BS that they have to show us proof of this place being cheaper.

        asking for proof is reasonable but when they need to call 3 local store just to find one that has stock so they can match price then its getting ridiculous. I have had them say no they wouldnt match a price for a game before, so i just walked out and priced matched it at EB with no hassle.

        I dont like EB so they have to be doing something wrong if i have had to go to EB to buy games.

        Ive decided to try and buy at Big W or Target from now on as they normally have the cheapest prices. Issue is that the closest Big W is 20 mins away while EB and JB is like 5 mins.

        Last edited 04/02/14 8:15 am

        I work at David Jones and if we didn't ask for proof people would be ripping us off constantly. They're not necessarily trying to bullshit us, but you get heaps of cases of other stores selling lesser packages of items or lower models which look the same, and people just don't realise we sell the higher model with heaps included in the box so want the same price.

      I've never really understood price matching, why not just buy it from the people who have it cheaper? Unless I suppose it's super inconvenient for you to go to the store that has it cheaper I suppose.

        Usually it's because the other store is out of stock and most stores don't bother checking (I've been on hold up to 30 minutes before to check stock in another store when told I had to, not worth it) or because they want to use their favourite stores loyalty program.

        Last edited 04/02/14 10:20 am

    Well maybe if they had better services skills and employed people who knew things about games, they might do better at it. JB as a whole has lost what they had. They are no longer cheap and their services sucks.

      Wouldn't be suprised cause nearly at every jbhifi I go to. Have all hipsters working there... and we all know how hipsters act an all.....

        They don't seem to move out of the way either. There must be at least SOMEWHERE else they can sit cross-legged.

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    I highly doubt Target/Big W/K-Mart are in any position to steal market share from JB.

    If anything I'd say EB would be the ones who took market share on these consoles. I mean EB has a stronger preorder system than any other retailer and their ability to do launches is better than JB. Hate EB all you want but they would have a better relationship with MS and Sony than JB, allowing them to order more consoles.

    Also you cant say the "Australia Tax" is to blame. If that was the case then these consoles wouldnt be sold out and nor would half the next gen games.

    Amazon has been doing some pretty good online sales as well. You could get Assasin's Creed 4 ps3 for 29bucks and upgrade it to PS4 for another 10. Thats less then half the price that many retailers have the game in Australia.

    Last month Dick Smith had a few PS4 titles for 54. Could probably find cheaper overseas, but I consider $50-$60 a good price for games in Oz. Not the 90+ steal that most retailers put on us.

    The way I see it is a lot of people probably have what they now want in terms of games and just wait on the new release stuff which currently isn't much since it's a dead time of year for that and retail in general.

    Also these sales they constantly have on Blu-Rays, DVD's & Music HAS to hurt their profit margin, cause the last 4 or so months they've had the 2 for 20 or 2 for 30 deal going for Blu-Rays which seems to have just ended. In some cases I was saving something like 5-10 dollars on titles, which makes me wonder if there was any profit left in the item after store costs were taken out of it.

      They were pretty much begging us to take Blurays on the Xbox launch night, and not a single person bought one.

        I kind of get that feeling with all these extremely lengthy and stupidly priced sales and the fact they email me 20% off coupons every few months for blu-rays & DVD's.

        That's kinda sad they were doing that though :P

    i think if i remember from my time at JB HiFi, the games department is broken into two sections for sales numbers GAMES HARDWARE (console, accessories) and GAMES SOFTWARE (Games & the like).
    So console sales wont factor into software sales as they are classified differently.

    Plus you should expect to see a small drop in software sales given that those customers that bought a new console this year have up to $600 less to spend on Games software this year than they did this time last year.

    Maybe it's cos new consoles don't got no gaems.

    I don't think DVD sales are dropping as fast as people think.

    Blu-Ray and DVD are actually competitors so it's not in DVD's interest to phase out DVDs, it would be a different story if HD-DVD won the format war.
    I've been in JB when a guy tried to buy a DVD player, they desperately tried to upsell him to a Blu-Ray player but he'd have none of it. He wasn't an idiot either he had sound reasons, It's for the kids, they'll break it with in the year, it's for a small TV.

    Blu-Rays aren't that much of a step forward, what appears to be the true killer of DVDs is streaming and pay on demand services. Of course they did get a major handicap thanks to the determination of the Minister for IT to continue to use Can's with a string between them and other faulty nearly dead technologies.

    I reckon we only met 20-30% of demand for the new consoles (ps4 in particular) and we got the lions share of the stock in our town. The lack of stock to sell was an absolute disaster, is still a massive issue.

    Steam and GMG discounts have ruined me and I have a hard time paying more than $50 for a new game now, which makes me go for PC versions rather than console (where available).

    I bought my launch day games from JB and have regretted it. Having to swap discs on my favourite games is annoying when I can voice command to any of my digital purchases. Because it's so easy to buy Xbox One games from the US store too (just go to the US website in your browser and add a paypal account to pay with) I've just taken to buying them for basically the same price as in store digitally.

    What happened to JB selling those cheaper import titles? I mean, their selection was crappy, limited, old and still overpriced, but if the local distributors are hurting you that much, look elsewhere

      Wouldn't surprise me if it was a stunt to get better prices out of local distributors, which they don't pass on to consumers except in sales. Probably why they can afford to massively discount new games for the first couple of weeks then pump the price back up.

    T would be most definitely dvd sales pulling it down.

    I cant remember the last time I got a dvd for myself.

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