Software Sales Continue To Plummet At JB Hi-Fi

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JB Hi-Fi just released its half year results for financial year 2017.

It's a tremendous success story. Total sales are up by almost 12%, gross profit is up by 13.2%.

But software sales continue their downward spiral.

According to JB Hi-Fi's reports, its increase in sales was driven by a 15.8% increase in hardware and services sales and a 12.6% bump in the Communications, Audio, Cameras, Accessories, Computers and Home Appliance categories. JB Hi-Fi also acknowledge that the loss of Dick Smith contributed to a bump across the board.

But software sales are down a whopping 9.4%.

It's a familiar story, software sales dropped by 5.4% last financial year and have been in decline for years. As we move towards a digital distribution in music, cinema, TV and video games, it makes complete sense. It's difficult to see how this trend could be reversed.


Comments

    I'm surprised to see JB's software sales in decline. Digital, especially in Australia, is often more expensive than that of buying physical copies through retail. JB usually has pretty good prices on new release games, too.

      I buy 90% of my PC stuff from JB (including games) the only time i'ved looked elsewhere is if I think the price has been too expensive (only been once or twice last year). I prefer hard copy to soft copy anyway. When ISPs give us unlimited downloads then I wouldn't have any issues about going digital.

        really? I found, given the proliferation of digital sales for PC games, you don't often have to wait more then a month or two before somewhere out there having a sale

        the download size though is a good point, that says since every game these days seems to have a day zero patch it's hard to avoid needing to downloading another gig or two

          Depends if your ISP is a steam mirror and unmetered. When you also consider the convenience factor, the deliberately chaotic atmosphere of the stores, and really marginal differences in price there's really no point going there.

            is that still a thing? I remember iinet or something doing unmetered Steam downloads back in early 2000s

      Exactly what i was thinking. I am all for digital distribution but i seldom find it the better choice price wise so i stick with physical copies.

        I am happy to pay the extra 10-20$ for the convenience of not having to go to EB / JB. I don't share the same feelings others have about looking over at a library of game boxes and feeling pride. I like to click through, buy, download and play all from my desk. I have unlimited NBN right now and so downloading a 20-60GB game isn't much of an issue. But I know I am in a tiny minority there.

          I work in the city so it isn't an issue for me to get to JB on the way home, but even with that being the case I haven't bought a retail PC game for many years. So even with the minority going full digital (which is fair enough because why not), there are loads of people like me that probably do all their PC through Steam and then maybe 20% of console purchases on the PS/bone shop. I'm definitely spending a lot less at JB, which is my go to for buying games.

          e: I also live in the unlimited NBN land of milk and honey and I'm sure that accounts for me going digital more and more often.

          Last edited 13/02/17 11:11 am

            I'm in the same boat, I live in the city so it's about three blocks before I hit a EB, a little further for JB, and a bunch of other stores in between. The thing is even without NBN I prefered it because I can download XBOX One games ahead of release. I play most of my new release games at one past midnight on launch. I would buy stuff at work and it'd be ready to go when I got home.
            The major factor for me is that I don't want clutter. I stopped buying DVDs because I had mountains of them. CDs too. Digital is the perfect storage solution for me.

              I need to clear out the spare room to make way for a small person... But there is a small part of me that doesn't want to part with the DVD's (even though I don't watch them) or the PC/Xbox360 discs (which I don't use or are incompatible). When you look at the cost of buying all that, tossing them out just seems wrong.

              But all it is really is clutter.

                Yeah, but you don't feel bad about throwing a movie ticket in the bin. You've had your fun and it's over. Some things are just consumeable like that. The way I see it is if I'm not collecting and I have no plans to use then I'm just hoarding. Instead of being packed away so densely that I can't get to them they can go down the Salvos where someone might actually use them.

                Besides, your time for working DVDs and electronics is about to come to an end. =P

                  I know... The full box set of original Futurama is largely redundant now it gets a repeat run on Foxtel, I can't be bothered watching Bebop anymore....

                  But still all those Red Dwarf DVDs need to stay.

          It still blows my mind that the exact same data is $10-$20 more expensive when NOT printed onto plastic, then encased in more plastic before being vacuum sealed in another layer of plastic then shipped to another part of the world.

            The entire reason why it's cheaper in store than digitally is because, if it was- NO ONE would go to a store. Companies rely on stores to sell their gaming consoles, so if those companies lowered the price of digital games and people stopped buying games in store, then stores would just stop selling the consoles as they don't really make money off them anyway.

          Fair enough, man. I guess I'm a bit of a cheapo. :P I try to save money when I buy games, as they can be pretty expensive. Also, since I live in a small town, driving around everywhere is super easy, so it doesn't take me long to go to the shops and buy a game.

          To further my "cheapo" status, I'll also go online or/and make phone calls to see who has the cheapest copy, then make EB Games price match it. :P

      I haven't bought a physical PC game for many, many years - you'll always find better pricing with digital PC games.

      As for consoles, I tend to buy digital where it makes sense, but if I'm going to get screwed by pricing then I'll go physical. I don't buy a lot of console games, so if I spend $5 more I'm not too concerned.

      To channel some GabeN, PC is the place to be!!

      Between huge game download sizes and the higher price points, I'll always go physical over digital for PS4 games wherever possible. Steam being unmetered on my plan, digital always wins out for PC.

      Digital is often more expensive for new releases, but I find sale prices tend to be cheaper for digital compared to physical. And I rarely buy new releases these days because my backlog is so bad that I don't need anything on day 1.

        This is what I do... I barely have time so I wait until they are $20-30 cheaper digitally.

    It's not going to be reversed while the majority of the games are being released on platforms like steam. What's the point of going to buy a game like Doom or Evolve (for example) then getting home and having to do a massive steam download anyway. Might as well just buy direct from Steam. Or Uplay, Origin, Gog, etc.

    Only way they're going to compete is if they actually have specials that are cheaper than the online platforms, and damn that's gotta be tough.

      Actually for a bunch of new release AAA titles you get great deals from JB, along with Target and (occasionally) EB. Every time a massive AAA title gets released Kotaku does a little 'cheapest place to buy XXXX' article, and 99% of the time it's offline.

        That may be true, but I probably miss most of those since I don't buy most of the AAA titles since the majority don't interest me. And to be honest, these days I tend to hold off for a couple months and buy when games are on sale not immediately on release. So that advantage is lost (on me anyway).

        And like I said the last few I have bought required a massive download when I got home anyway. I feel like it's defeating the purpose of buying a physical copy (but that's Steam's fault not JB).

          Ah, a fellow c̶h̶e̶a̶p̶s̶k̶a̶t̶e̶ deal hunter!

          I'm in the same boat - I very rarely buy games on release, and haven't bought a physical copy of a game for maybe 5+ years.

            Definitely, I have such a backlog of games (thanks to Steam Sales, GoG and Humble Bundle) that I have too much to play so I don't see the point in rushing out on day one anymore. About the only stuff I really want to rush out and buy is from the guys who made Witcher. I want to encourage their awesome attitude towards DRM and copy protection.

              I pre-ordered the Master of Orion reboot since MOO2 is one of the best games of all time, but that's about it!

              Also, in the year 3097, I will by Half Life 3 on release.

              Last edited 15/02/17 11:40 am

    It's difficult to see how this trend could be reversed.

    A little more respect thrown the way of the customer base that propelled those software sales when it mattered would be a nice start.

    The dawn of the last gen - Wii/360/PS3 - through until probably the launch of the nuke that was the iPad (and then of course the better iphones that doubled down on gaming) was the glory days for Australian gaming retail.

    We will never see market penetration like it ever again. That's not the worst thing in the world, however.

    You can't walk into a dedicated games store without tripping over funko pops or other unrelated plastic tat these days. Does JB Hifi stretch into the shitty toy and expensive plastic figure market to cover its arse here?

    No. We should realise that physical software sales rely traditionally upon hardware cycles - console generations as we know them.

    The console manufacturers that cater to this model, whether they be established (Nintendo) or new (Amazon?), will court the retailers and hopefully maintain the equilibrium a little longer.

    Sony is a special case - if PlayStation as a brand slowly starts becoming a console you incrementally upgrade - like a certain tablet I mentioned earlier, yet it still expects consumers to treat a new VR headset every few years like a fresh new console then it gets to have its cake (go almost 100% digital) and eat it too (still has a retail presence that's boosted the way a console launch tends to do so).

    Sorry for the rant and especially the lack of full stops just then.

    I shop around for the best price & JB is a store I often buy games from.

    That said, my preorder of FFXV was shoddily handled. They seemed to forget I'd even made the order, then I had to wait 15mins while they fumbled around trying to grab e another copy.

    Also, my local has drastically dropped the size of the department. Far less choice than there used to be & I ended up back at EB on the weekend because they didn't have anything that wasn't really new.

    I buy retail when digital gets hit with a distribution tax AND I can get a steam or (with xbox) a play anywhere key. If those aren't coming with, I'll wait for sales.

    I always buy a physical copy of a game because if I buy something I physically like to have it but JB's prices are always to high for me to do that so I source a cheaper option

    I always buy console games retail unless they happen to be really cheap due to a sale on the online store. Only buy indie games for my PC though.

    I walk in, check 3DS games, see that they're 100% RRP with no discounts, I walk out.

    For me it comes down to JB Hifi not being as competitive on pricing as they were in the past.

    I refuse to buy a PC game physical nowadays, because half the time (or more) the game requires a) steam/origin/battle.net/uplay/whatever anyway and b) requires a giant download post install. Both of these things I can do a) for much cheaper online and b) without having to leave my house.

    As for console games, there's much less options here, since the online stores price themselves out of the market. But most of the time JB Hifi in this case arent the best price either. I also dont preorder ever anymore, since I've been burnt too many times on bad games.

      Exactly, nobody seems to recall or flat out ignores the fact that JB used to have things down pat with regards to choice, deals, range, and pricing.

      What other department in these places outright raises the price of its stock when it starts to see LESS people purchase it?

    If JB could offer digital copies of games at same price as their physical copies, I'd continue to buy from them. Not that this would ever likely happen.

      There was one xbox game that they did a special deal with the digital copy being the same amount as the physical one on day of release. I have a feeling it was a forza game, but when I asked the staff a few weeks after release they said they had hardly sold any. Mind you im in a regional area that still seems to heavily favour physical copies over digital (internet here runs off potatos).

    Well I'm pleased to see that JB Hi-Fi are increasing their sales at around 13% since Dick Smith closed down years ago despite losing $25 billion dollars in falling sales which also happened to Woolworths hardware giant Masters losing $600 billion dollars in falling sales over the last 4 years and I have one to say to JB Hi-Fi. JB you've still done it again with your increasing profit of sales and yep I still shop at JB Hi-Fi not only for video games and accessories but also for DVDs and 4K UHD Blu-Ray movie titles. JB Hi-Fi you are Australia's number 1 home entertainment retailer.

      I'm buying you a packet of 'full stops' for Xmas.

    I buy everything online now. The only benefit I see to hard copy distribution is game swapping. Stores like EB games must also be really suffering.

    PlayStation/PSN seem to be making in roads to parity pricing Gravity Rush 2, Horizon Zero Dawn and Last Gaurdian were all $79.95 as per orders/new from memory. Which for me is an enticing proposition to buy them digitally. I rarely trade games in so not being able to so on a digital games is somewhat moot for me. I also can attest to avoiding playing a physical copy of a game because I'm to lazy to put a disc in, same goes for movies/TV shows also (when I can stream it or something else). Sincerely lazy lazy man

    because the software total includes music and movies, I think you'll find that the decrease in games software is far lower than that average across the departments. There is a decrease but not as dramatic as 9.4%. Music makes up most of the fall.

    I walk in to JB, see that they have pretty good deals on games, remember I don't have an optical drive on my PC anymore, then I walk out.

    EB gets the preorders from diehard fans and the special editions, while Target & Big W does the steep sales. Stuck in the middle, it puts JB in a tough spot. The last time I bought games at JB was when they sold out old PS3 & 360 stock at $1 per game.

    A huge part of the problem is that several major producers no longer distribute the PC edition physical copies with the full installation media. They give you one disc with the installer program, which then downloads the rest from the internet. Or for those feeling even more lazy, the disc case contains a steam code and a couple of informative leaflets. As a result, the PC physical edition market has plummeted in general.

    JB Hi Fi included music and video as "software" too, right? It's not too surprising that those are declining with the growing popularity of streaming alternatives (Spotify, Netflix, etc). Their own entry into that field (JB Hi Fi Now) ran out of steam when the global players entered the market.

    Good, JB Hi-Fi have been invariably terrible with customer service.

    I get all my software via torrents for free so it costs me nothing for my games. And i have heaps and heaps of games.

    If you have a PC the only thing you should be buying in JB is a Steam voucher.

    My experience with JB has been excellent customer reps, good prices for new games and really expensive prices for preowned games. If they were more competitive with pre-owned, accepted trade-ins and offered a trial period like EB, their sales would improve. The trial period is the main reason I go to EB.

    Last edited 13/02/17 6:37 pm

    I'll do anything that doesn't involve using Origin.

    Just nabbed the starcraft 2 battlechest for $14 at my local jb over the weekend, even the cashier did a double take at the price, heh heh. Had a look at the digital price for heart of the swarm- $40 by itself, no thanks!

    Their prices simply aren't as competitive as they were in the past. I had a voucher to spend at JB, took me 6 months to find something worth spending it on.
    Big W and Target have them beat on most AAA new releases and Ozgameshop among others destroys them for everything else.

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