It’s been a big year for video games already — but not necessarily for those selling them. JB Hi-Fi posted their annual results to the Australian stock market this morning, revealing a jump in sales to $5.31 billion despite a double-digit drop in software sales.
The fall in software sales and a noted “decline in the Games Software category” were the only real blemishes on what was otherwise a sterling result for the yellow-branded retailer. The company’s underlying sales jumped by 12.5 per cent to $5.31 billion from $4.72 billion from the last financial year, while the company’s gross profit rose by almost 12 per cent to $1.16 billion.
In a year absolutely ravaged by COVID-19, that’s a pretty good return. The biggest highlights for JB were a 14.6 per cent rise in small appliances, computers, communications, visual (read: TVs) and audio sales, while online sales soared by 56.6 per cent over the financial year. Online now makes up almost 8 per cent of JB’s total retail, and I imagine the next quarterly figures will make for real interesting reading.
Video games, on the other hand, didn’t have the best time. While there were some massive releases — Final Fantasy 7 Remake, Animal Crossing, DOOM Eternal, as well as the big hits of 2019 like Death Stranding and Red Dead Redemption 2 — the back end of the year was obviously hit hard by COVID:
Software sales were down 12.1% with comparable sales down 11.7% as a result of continued declines in the Movies and Music categories, and a decline in the Games Software category as we cycled strong new release titles in the [previous corresponding period]. Software sales were 7.3% of total sales (FY19: 9.3%)
The downward trend in video games for JB isn’t a surprise. The company announced that games had significantly dropped in their half-yearly results, and the COVID effect on the big March/April releases (Animal Crossing, Final Fantasy 7 Remake) certainly couldn’t have helped.
And unlike last year’s full-year results, video games weren’t earmarked as a focus for JB Hi-Fi in the next financial year. Instead, JB nominated the expansion of Communications and Connected Tech as well as adding more capability through their online offering. There’s also talk about integrating “the instore and online experience”, although the line item about “focus on growing top line sales and gross profit dollars” could obviously result in more video game discounts down the road.
The other part of JB’s success was The Good Guys, which JB Hi-Fi acquired a few years ago. The whitegoods retailer saw growth in TV and computer sales over the 2020 financial year, and the executive announced The Good Guys would be selling more telco products over the next financial year, as well as the “continued expansion of telco product and services in partnership with Telstra”.
Still, things should be on the up for JB Hi-Fi and other retailers from here. Despite the delay to Halo Infinite and the impact on the Xbox Series X/S, 2020 still has plenty of big hitters lined up. Assassin’s Creed: Valhalla and Cyberpunk 2077 are likely to go gangbusters in November, even if the latter won’t be fully optimised for the next-gen consoles. Watch Dogs: Legion and Crash Bandicoot 4 are likely to sell millions of copies combined in October, and it would take a cataclysmic event to stop Tony Hawk’s Pro Skater 1 + 2 from being a massive success. There’s also Miles Morales for the PS5, which should do very well following the tens of millions of sales for Insomniac’s Spider-Man.
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