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As store closures mount up, is there hope left for physical games outlets?

Forums - Gaming Discussion - As store closures mount up, is there hope left for physical games outlets?

I mean, it's still a multi-billion dollar business and every console manufacturer is dependent on them to get consoles out. GameStop, Walmart, and Best Buy make up the majority of all US console sales.

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There will always be a place for console kiosks.... but for the most part physical dedicated retail gaming stores are obsolete.

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DreadPirateRoberts said:
The_Liquid_Laser said:

Brick and Mortar allows hardware to be cheap, because brick and mortar makes their profits on software.  That means they are ok selling hardware at roughly cost.  Without brick and mortar, then hardware will need to be sold at costs similar to a PC.

Also brick and mortar specialty stores like Gamestop provide very effective and efficient marketing.  That cannot be underestimated.

Brick and mortar stores will make a profit on both hardware and games.  Gamestop and Best Buy don't subsidize the cost of consoles to sell them - Sony, Nintendo and Microsoft do.  Though, obviously, they will make more on software both because the margins are larger and because of much larger overall unit sales.  

Everything you claim brick and mortar does is actually what the console makers do.  Sony and Microsoft especially have traditionally subsidized early console sales because they want their systems in the hands of as many customers as possible.  And that is because software drives their own revenues.  So no, the loss of brick and mortar games stores will not force console prices to rise at all.

As far as your "other reasons can cause a crash like 83" comment goes, that's basically meaningless argumentation.  You tried to tie the disappearance of physical storefronts directly to what happened in 1983.  There's no indication that is likely.  In fact, there is no indication that any crash is likely given the gaming industry continues to grow even as companies like Gamestop drown in red ink. 

It is true that the console makers subsidize the cost of consoles.  However, the stores don't make a profit on them either.  The margins are slim to none.  Selling hardware is not profitable enough for retailers by itself.  They sell the hardware though, because they can make decent margins on the software.  Take away the software and all of the sudden brick and mortar stores will stop selling hardware.  Then console makers are in deep trouble.  Not even Amazon would sell hardware without the software to go with it.

And of course there is a huge marketing advantage going through a brick and mortar store, especially a specialty store like Gamestop.  Take all of these advantages away and...crash.

Last edited by The_Liquid_Laser - 4 days ago

How quickly physical games disappear from the market is entirely up to console companies and video game publishers. Publishers almost unanimously agree that strictly digital sales is their preference. With digital endeavors, there won't be any need for the middle man. (retailers) Alot of money also gets saved by cutting out shipping costs and the retails industries cut of the sales profits. It's not a question of "IF" it's a question of "WHEN".

The question we SHOULD be asking is if internet in the United States will be ready for a video game digital market. Because as it stands right now; that answer is "Hell No". Internet companies, their shitty business practices, shitty speeds, and the overall average speed of internet in American households is no where NEAR ready for the digital age.

And if they (video game companies, consoles) rush into the digital market too fast - the people who will suffer from it will be almost entirely gamers.

Scoobes said:
The only way retail stores survive is if they switch their main revenue streams from physical products to something more experience based.

E-sports, competitions, retro events, dev talks/signings, lock-ins etc. All with snacks and drinks. They might still sell physical games and merchandise, but the only way they stay afloat and possibly thrive is if they find other ways to bring in money and customers.

Going for experience as opposed to purely product based is pretty much the only way anything on the High Streets is going to survive.

You just described what The Gaming Zone in Phoenix AZ does. They also sell used games from every generation. Gamestop, and other chains really just sell from this gen, and last gen. 



I was so wrong about Nintendo this year. They had a great year, Poke'mon Let's Go was legitimately a big release. 

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I wish GameStop would go back to the EB / Babbages / FuncoLand style of retailer they originally were and offer a wide selection of both new and classic console hardware & software with specialty items / merch added in. Would get a lot more people in their stores.

On 2/24/13, MB1025 said:
You know I was always wondering why no one ever used the dollar sign for $ony, but then I realized they have no money so it would be pointless.

TranceformerFX said:
How quickly physical games disappear from the market is entirely up to console companies and video game publishers. Publishers almost unanimously agree that strictly digital sales is their preference. With digital endeavors, there won't be any need for the middle man. (retailers) Alot of money also gets saved by cutting out shipping costs and the retails industries cut of the sales profits. It's not a question of "IF" it's a question of "WHEN".

The question we SHOULD be asking is if internet in the United States will be ready for a video game digital market. Because as it stands right now; that answer is "Hell No". Internet companies, their shitty business practices, shitty speeds, and the overall average speed of internet in American households is no where NEAR ready for the digital age.

And if they (video game companies, consoles) rush into the digital market too fast - the people who will suffer from it will be almost entirely gamers.

I get the argument of internet issues both in the US and in other parts of the world. However, Netflix is out there and it's working and making millions. I don't think physical will be 100% gone, but internet issues won't stop the industry to invest more and more on digital.



PLAYING: Horizon Zero Dawn (PS4), For Honor (PS4)

My Total Sales prediction for PS4 by the end of 2021: 110m+

When PS4 will hit 100m consoles sold: Before Christmas 2019

There were three ravens sat on a tree / They were as blacke as they might be / The one of them said to his mate, Where shall we our breakfast take?


The_Liquid_Laser said:
DreadPirateRoberts said:

Brick and mortar stores will make a profit on both hardware and games.  Gamestop and Best Buy don't subsidize the cost of consoles to sell them - Sony, Nintendo and Microsoft do.  Though, obviously, they will make more on software both because the margins are larger and because of much larger overall unit sales.  

Everything you claim brick and mortar does is actually what the console makers do.  Sony and Microsoft especially have traditionally subsidized early console sales because they want their systems in the hands of as many customers as possible.  And that is because software drives their own revenues.  So no, the loss of brick and mortar games stores will not force console prices to rise at all.

As far as your "other reasons can cause a crash like 83" comment goes, that's basically meaningless argumentation.  You tried to tie the disappearance of physical storefronts directly to what happened in 1983.  There's no indication that is likely.  In fact, there is no indication that any crash is likely given the gaming industry continues to grow even as companies like Gamestop drown in red ink. 

It is true that the console makers subsidize the cost of consoles.  However, the stores don't make a profit on them either.  The margins are slim to none.  Selling hardware is not profitable enough for retailers by itself.  They sell the hardware though, because they can make decent margins on the software.  Take away the software and all of the sudden brick and mortar stores will stop selling hardware.  Then console makers are in deep trouble.  Not even Amazon would sell hardware without the software to go with it.

And of course there is a huge marketing advantage going through a brick and mortar store, especially a specialty store like Gamestop.  Take all of these advantages away and...crash.

Can you elaborate more on that. With more than 100m current gen consoles out there (PS4+X1), isn't that enough sells to justify the market, at least for Amazon and Walmart?



PLAYING: Horizon Zero Dawn (PS4), For Honor (PS4)

My Total Sales prediction for PS4 by the end of 2021: 110m+

When PS4 will hit 100m consoles sold: Before Christmas 2019

There were three ravens sat on a tree / They were as blacke as they might be / The one of them said to his mate, Where shall we our breakfast take?


outlawauron said:
I mean, it's still a multi-billion dollar business and every console manufacturer is dependent on them to get consoles out. GameStop, Walmart, and Best Buy make up the majority of all US console sales.

They could get consoles out without Gamestop, couldnt they? They have walmart, amazon, best buy and many others round the world.



PLAYING: Horizon Zero Dawn (PS4), For Honor (PS4)

My Total Sales prediction for PS4 by the end of 2021: 110m+

When PS4 will hit 100m consoles sold: Before Christmas 2019

There were three ravens sat on a tree / They were as blacke as they might be / The one of them said to his mate, Where shall we our breakfast take?


NobleTeam360 said:
Gamestop will probably have to reduce the number of stores by a good amount.

Yes, I don't think games outlets will 100% die. There must be a reasonable size for those chains where they can survive with games and a few other geek and entertainment stuff. Besides, they can add more products. Why don't they sell manga and comics, for example?



PLAYING: Horizon Zero Dawn (PS4), For Honor (PS4)

My Total Sales prediction for PS4 by the end of 2021: 110m+

When PS4 will hit 100m consoles sold: Before Christmas 2019

There were three ravens sat on a tree / They were as blacke as they might be / The one of them said to his mate, Where shall we our breakfast take?