Online retailer quits selling games, blames industry
DVD Empire, where the completely addicted go for digital entertainment (it says here), has axed its games division and placed the blame on the slouching shoulders of an apathetic games industry. The online retailer has set up a Myspace page detailing its reasons for doing so, as well as highlighting a newly announced "20% off all games" sale.
The overarching reason for calling it quits is rooted in DVD Empire's classification as a "small" retailer compared to the likes of Gamestop and Best Buy. Consequently, the site claims to have difficulty with things like timely distribution, "industry greed," price protection and returning unsold games to pubishers. It seems reasonable for the most part, but choice phrases like "we all know how fast games devalue in prices; this is due to the fact that 80% of the games created are crap," or " it is impossible for us to make money selling video games," sound akin to the thumping fists of a child in the midst of a tantrum.
In an effort to gain a clearer understanding of the situation, however, we contacted Tronix, a small retailer based in New York, and asked them to comment on each of the points made by DVD Empire. For the most part, Tronix reinforces the complaints, but also makes it clear that the industry isn't entirely the success-stomping villain it's been painted out to be.
"Some of what DVD Empire states is true," says J. Cataudella. He shares his personal experience with regards to the list of complaints:
1. Video game industry does not care
"The Video game industry (publishers) only sell to mass merchandisers and distributors (i.e., middlemen), because minimum orders are usually way too large for a small operation to handle. So in essence, yes, if you are a small retailer, publishers are not even approachable. Oh, and I remember when I first started up and worked for a small computer gaming retail outlet, Nintendo and EA would actually sell directly to our store with very small minimum requirements. Of course, that was back in the 80's."
2. Can't make money
"You need to sell high volume to make up for the poor profit margin. If you are buying from a distributor, you are paying more than a mass merchandiser who is purchasing direct from the company. Not to mention, part of your earnings go to the credit card companies for accepting their cards."
3. No price protection, game prices drop quickly
"Yes, there is no price protection for independent retailers, and prices drop quickly in this hit or miss business. It does not affect us (Tronix) as our suppliers are the one with the inventory to worry about – we just bring in what is needed daily for each order. I can see how frustrating it can be for small shops that have to keep stock around."
4. No product returns
"That's correct. You need to research the upcoming games as thoroughly as possible before finalizing your numbers; you are definitely stuck with them. Look for early reviews, gossip, publisher/game designer history, and always stay way low on movie-based games. Most games do suck, and can have even a "one day lifespan", where as titles like Animal Crossing on the DS can sell practically daily for an entire year."
5. Distribution is dumb
"It's not that they're dumb. Distribution have to deal with headaches similar to the small retailer, but on a much larger scale. We happen to be in the same vicinity as our suppliers, so we receive our new releases on the same day as the big mass merchandisers, or at most, a day later. Game Companies however, offer specialty shops like EB and GameStop promotional/bonus items to encourage pre-orders, which the independent retailer is never part of as we are forced to deal with distribution."
6. Games are better suited for brick and mortar retailers
"It all depends on your business model. If you have a niche market, you can survive among the big guys on the web. Our customer base is 98% international – we have very few US customers, otherwise we would have not been around as long as we have."
Is it tough surviving in the gaming industry as a small retailer? Absolutely, and with corporate giants like Gamestop absorbing smaller outfits, it looks set to get harder, even in the online world. But is it impossible? Lashing out at the industry might not have been the most mature approach for DVD Empire to adopt, but at the very least, we've been given further insight into what goes on behind those virtual shopping carts and garish sale banners.
[Via Next Generation]
