JB Hi-Fi Is Doing Great, Except For The Software Bit

Image: Supplied

Regular Kotaku readers will be pretty familiar with JB Hi-Fi. They're one of the cooler retailers — if such a thing applies — serving the entertainment and gaming space. A lot of JB employees are gamers themselves, and more often than not you can get a decent discount.

But the part of JB's business that sells games isn't doing well at all. In fact, it's struggling.

The retailer announced their full year results today, and generally speaking investors are pretty happy. JB's shares opened at $29.15 this morning and hit a high of $29.43, a healthy jump from their close of $27.37 at the end of trade on Friday.

And it's not hard to see why. The company posted a 8.3% jump in sales to $3.95 billion. Their online sales business has absolutely rocketed too, and the Computers, Visual, Communications and Accessories categories all contributed to a 10.8% jump in sales for the company's Hardware and Services sector.

But Hardware and Services doesn't account for music, movies or games. Those three categories are part of JB's "software" sales — and that part of the business isn't doing well at all. Software sales shrunk by 5.4% for 2015-16, and on a comparative basis it's 7.6% down for the year.

That doesn't really explain how well games are doing in the overall story of things. But in one of the slides JB put out to investors and media today is a handy picture of the company's business model, showing how much each segment has contributed to JB over the years.

Image: JB Hi-Fi FY2016 Full Year Results

According to the visual, music and movies contribute slightly less. The closure of Dick Smith Electronics is tipped to send some profits JB's way too, mainly through extra sales of accessories, home appliances and related items.


Comments

    Actually, JB HOME is the cooler retailer.

    I'll show myself out.

    That's what they get for not letting me return my Logitech steering wheel because "I don't want it anymore" wasn't a good enough reason. Luckily I went back the next day without the power cable and was able to get a refund because it was missing a piece.

    Last edited 15/08/16 6:04 pm

      That's what they get? An approx 6.5% raise in their share price? Aren't you magnanimous :). I would have thought the steering wheel would also have fallen into their hardware/services category, which rose, btw.

      UNder consumer rights they are not obligated to you're demand, as the ACCC states: "simply changes their mind, decides they do not like the purchase or has no use for it"

      You certainly live up to the username because that was a douche thing to do. You can't just expect to return something because of a bs reason like i don't want it anymore. I'm shocked they actually gave you a refund but then again probably just wanted to get rid of you.

    The last time I bought anything game related from JB were PlayStation Store network cards, so I can buy No Man's Sky for the SAME PRICE as what they were offering on disc. JB was a budget label, but has premium prices. The last time I can work out they were competitive with Target or Big W was pre-order pricing for Battlefront. Since, they're second only to EB Games in terms of a premium price.

      This. Definitely this. They've gone from being the best in pricing at one point to being the worst/second worst/in line with the worst. There's zero reason to shop there now so why wouldn't they be struggling?

        When it comes to actual games I wouldn't be at all surprised if their PC gaming bit is doing nothing. The range has shrunk almost to nothing. And probably 90% of the games that are available are also available on Steam.

        While there are still tons of movies and music on their shelves I'd guess they suffer a similar problem. You can buy them digitally for cheaper, or just stream them.

        I hope the music and movies sections don't wind down though, I like the ability to buy a physical copy so I can watch/listen whenever I like.

        Completely agree - at the moment the best prices are sadly at Target and Big W, JB have not had competitive prices for 2 years now and have not had competitive trade in values since the release of the X1/PS4

      I used to work at Target in the entertainment section. Although our prices on new release games were usually the cheapest, the amount of stock we had was next to nothing. We would sell out within a day or two if it's a big title, and then have to deal with unhappy customers who come in asking for the game only to be told we don't have any.

      Once titles weren't new release anymore they quickly went back to full (ridiculous) price. Last year Black Ops 3 was selling for like $69 (no stock), and copies of advanced warfare were like $99.

      Target sells these at a loss to lure people in (I'm sure we're all aware), in hopes of them buying other cheap shit with ridiculous markups. For example at my store we also did t-shirt printing on the spot. $20 for a cotton tshirt with a print on one side. They cost about $1.50 to make - tshirt itself costs less than $1 and if you were to do an entire A3 sized print on an XXL tshirt it would be about 80c worth of inc.

      From JBs perspective, that's pretty hard to compete with. Target gets to advertise a ridiculously cheap price for a lot longer than the abysmal amount of stock lasts, so even after the stock has run out they're still attracting customers into the store.

      If you went in to JB and they didn't have any advertised games in stock, you'd be pretty pissed off. But because it's target and theyre not seen as a gaming/entertainment retailer no one cares.

        to be fair, Target has great prices online and you can pick it up for free (albeit you have to wait a few days). The only exception was Uncharted 4, sold out online and in store v. quickly so agree with you on that game.

        I'd be curious to know how many people have actually gone in there with the sole intent of buying a game, and then decided "What the hell, I might as well print a t-shirt while I'm here" :P

    With online computer games distribution it is to be expected, that said they are EB Games biggest competitor and more diversified... and JB is where I buy my Bethesda and Ubisoft games :P (cause Australia tax sucks)

    It's only a matter of time before physical software sales go the way of the local video store. I don't think it will ever completely disappear, but will become a niche thing if it hasn't already.

      Not whilst console storefronts price games for 100 aud that you can get physical copies of for 64 to 79 aud.

        I have a theory that the major console storefronts set their prices higher than RRP in order to support the bricks and mortar retail industry, which still provides a visible presence of their products.

      They were only rental places. DVD's are still big business. Nearly everything advertised is still DVD unless it's a JB catalogue, then it's a mix. I only rarely buy movies these days, but Blu Rays are still great to have for favourite movies.

    Just came here to post my shock that JB has been around for 12 years now. Feel positively old.

      Uhhhh their first store was opened 40 years ago...

        Ok... and now you've made me feel exceptionally old, and dumb.

        But I grew up in Brissy, so that'd probably be why!

      Ahh a bit longer than that mate... I remember when it first came to QLD in like 2002 but it had been around in Victoria for aaaaaggggges.

      Checking Wiki it says since 1974! So if you remember it from back then, yeah feeling old is totally understandable :D

        I always thought the Camberwell store was the first, but according to wiki it was Keilor East. I think the Camberwell store was where they really took hold of the market - massive range of music cds at the time at cheaper prices than everyone else (and where their "review cards" started).

          It's pretty interesting reading about the rise, but yes I always remember the Camberwell store when we visited Relatives in Hawthorn. Ahh good memories.

      It was in Melbourne for a long time before it moved to Sydney and anywhere else.

    Personally I feel it's because EB dominate the market because of their price match policy. Too many times I see people say they're going to price match at EB, why not just go to the retailer with the cheaper copy? Sometimes it's local availability but other times people just have too much brand loyalty to EB.

      I shop at EB games because I can take it back if you don't like it. You cant do that at JBHiFi.

      Having a lot of exclusive stock will always aid EB.

      Since the last independent game store shut, it would be nice to have a shop that specialises in games. EB shuts down we only have JB left and they are giving less of a shit about games.

        If it made them more money JB would start caring again. While I do appreciate a store that specialises, if EB becomes the last remaining retail outlet selling games there won't be anything left to price-match to and all their titles will be full RRP.

        K Mart's stopped selling games, Target and Big W seem to be getting out of the games business, if JB goes you'll be forced to import if you want anything at a reasonable price.

        To be fair EB doesn't seem to care either. At least the two I've been to lately. Their PC range is woeful now. It's 90% console stuff. And there seems to be less variety in that as well. More of that is top ten games with very little in the way of random less popular stuff.

      I tend to get things priced matched at EB because they actually seem to give a damn about the customers - though their standard prices don't reflect it. All the JB's around me have abysmal customer service (if you can get any at all) so I try to avoid them unless there's no better option.

      This plus there are way more EB games outlets than JB Hi Fi, my local mall is allegedly finally getting a JB this year, before that the 3 closest options were each about 20 minutes away by car

      I get them to price match Target all the time. Why? EB is 15 mins from my house and has free parking, Target is 20 and I'll have to pay to park. Also as others mentioned you can swap a game if you don't like it (which I'm doing with No Man's Sky after I write this)

      So people likely have all sorts of reasons. Maybe their friend works at EB and they want to give them the sale?

      With EB if you have a card you also accumulate "carrots." One day I'll find something that they're useful for.

      Oddly, JB usually has a better selection of Vita games (although neither typically have many.)

    I have found a few bargains at JB Hifi however lately their pricing for speakers and what not is almost double what you can find elsewhere.

    I am now hesitant to shop there unless I do some research first.

    JB Hifi is definitely no longer a first point of call like they used to be.

    Is that diagram meant to show the store layout or something? Pretty weird.

      It represents the percentage of sales in each department. The bigger the circle, the bigger the percentage.

        dedicated floor space based on sales. so, both

    I've found BigW to have the best prices for quite awhile. I'd often price match at EB because I do like having just a game store and they sell some cool merch. Now that I can get pretty decent discounts from shelf price at BigW by combining a few benefits together, I'll probably almost always shop there for games. Especially if I can get a console at a great discount (NX).

    If the one figure included movies/tv shows, music and games. I'd say it would be movies/tv dragging it all down the most since the introduction of Netflix and alike. followed by music due to spotify etc, and then games, but I'd say Movies/tv would be the biggest drag.

      Games have also been dropping a fair bit because so many games are bought digitally. It's a problem common to all data-based products (music, DVD, Blu-ray, games) with the only real growth segment being vinyl. If you look at the breakdown their really big growth area is home appliances, and the other growth areas are essentially hardware.

      Personally speaking, at the moment probably 80-90% of my game spend is digital downloads

    Never bought a game at JB. Only buy movies there.

      If you're buying retail, they are usually one of the cheaper options around for games.

        I was very disappointed with their EOFY sales. EB was shitting all over them by comparison. I find there's almost zero reason to shop at JB now.

        I want appliances it's almost always online, TGG, HN, or OW for the best price. It even feels like a drag just to get JB to price match.

    I won't buy from EB (because they are terrible), so JB has been my go-to for physical media. But if there's price parity between physical and download, download's just so much more convenient. (On the other hand, you can't share digital copies.) JB's just a little too expensive to be worth checking.

    If by cooler you mean staff with no dress code or manners who don't care about serving customers, then sure i guess...

      Every JB is different from my experience, my local one staff are great. That may be because I also work in the centre & know a few of them. But other JB's i've been to i've either gotten great service or total lack thereof. Sucks.

      You forgot incompetent. At leasy they are at Albury. If you're looking for the village idiots. That's where they all work.

    Isn't this just the slow and steady inevitable rise in digital game sales?
    I have about 12 physical games and over 130 digital games across my x1 and ps4. I went in to buy NMS the other day and they were sold out. They started trying to take my dets to contact me, I said "it's ok, Ill just buy it digitally."

    JB refused to price match a game (which they usually do) simply because it wasn't in their best interests. The staff are also usually rude and too concerned with their indie/hipster image. But worst of all is their pricing. When you're the same price as EB for new games (who also price match to other stores anyway) and over double the price of EB for used games, then you must be doing something wrong.

    I used to love JB. Now I only go in there if Target doesn't stock the Bluray version of a movie I want.

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