The Retail Perspective

Remember last week when I mentioned how a lot of game stores have closed over the past couple of years? Well, I heard about another one today, the Game Keep in TN (www.thegamekeep.com). The owner, A. Karl Myers, posted an explanation on his website and I thought it was a cogent summation of the issues faced by retailers today. While I don’t necessarily agree with all the points of his analysis, I think it provides a useful perspective on game retailing today so I’m reposting it here. I’m sorry to see yet another game retailer go out of business, though I can’t blame him either. Here’s the announcement:

Game Keep Announcement

The gaming industry is changing. A few years ago our game room was filled with gamers of all sorts. Card games were popular, as were miniature battle games. People were collecting clicky-based miniature games, and anxiously waiting for the next release of their favorite role-play game. The next new game was just on the horizon.

Then… nothing! Nothing new hit the market. Card games sputtered with a number of weak releases that added to the already-waning interest in the hobby. The card companies countered by releasing a whole new wave of card games based on every cartoon show having more than one fan. Most card players were not interested in taking up a new collectible game, after having felt that they wasted so much money in earlier games.

The miniature game manufacturers took a different approach. While holding off on releasing anything unique or ground breaking, most of them sought to increase their revenues from their existing customers merely by raising their prices. Fantasy gaming stagnated to near zero level while Sci-fi gaming carried the load until price increases drove players to seek different, less expensive, games. Some manufacturers rose to fill this void but had difficulty gearing up production to supply demand.

The role playing book market was flooded with a plethora of new material after Wizards announced their open gaming license. This required stores to double the amount of books they stocked, and as time wore on, left many shelves full of unsellable merchandise, especially as version 3.5 replaced version 3.0. Eventually, it was the consumer who decided that enough was enough and rpg books began to lose steam. The increasing prices of book publishing accelerated this dwindling trend.

The advent of the internet also brought its own level of challenge to this industry. With internet sales came a new breed of retailer, the internet discounter. These small companies kept overhead low by not needing prime retail space to sell their wares. Cost-conscious customers were drawn to these sites from advertisements in the very magazines and games sold in brick and mortar stores.

The internet also gave some game manufacturers a route to sell direct to the public, bypassing the old three tier manufacturer/distributor/retailer system. Soon they were distributing web-sales addresses on all of their product. Retailers were selling the seeds of their own demise with every product they sold. Some manufacturers went so far as to send out free give-away products designed to lure consumers to their websites.

The third strike from the internet was the advent of on-line role playing games. A large portion of our customer base was absorbed into block buster games like World of Warcraft and Everquest. The need to trek down to the friendly neighborhood game store to play was replaced with a stay-at-home mentality. This reached its peak during this late summer as gas prices soared following the Katrina-Rita punch.

The solution for these changes was a simple one. Diversify or close. Retailers moved into carrying game related merchandise such as tee shirts and bumper-stickers. Some even went so far as to carrying lines of non-game products such as statues and action figures.

Comic books also moved in to fill the gap. Others began dealing in used video games and supplies.

Of course, the events of recent history have also played a major role in defining the nature of the gaming industry. From the war on terror, to our recent rash of devastating storms, each event has changed the dynamic of business in America.

All through these changes The Game Keep has continued. Since we opened in October of 1996, we have managed to gain a reputation of being a complete game store, with a product selection second to none. We have been known as the place to get the hot new releases as soon as they come out. We have prided ourselves in being a hub of Nashville’s gaming community, offering, not only games, but a place to play them.

But things change.

All through 2004, revenues dropped, as certain games fell from popularity. As time went on, staffing was cut back to cut overhead expense. By the time of the Jeremy debacle last fall, I was practically running the store without help. Shortly after that, my last employee moved on, needing to find work that paid a living wage. By December I was considered closing the store, but the holiday revenues seemed adequate to continue and I opted to stay open.

This last year has been a struggle. Spring was the time when things began to become difficult. I cut back on expenses and managed with a bit of clever, “pay my Visa with my Mastercard” style, financial tricks, to survive until the summer, which is usually strong for game sales. Summer began slowly as it usually does and then went crunch as the economy faltered and parked when gas prices hit the stratosphere. Then fall hit and sales dropped further, to levels half of the previous (weak) year. The back to school September doldrums marched on through October and November. Even the last week in November that included the infamous “retailer Black-Friday”, was lackluster.

Put a fork in it.

After long and arduous soul-searching, I have decided to close the store following the Christmas Holidays.

Commencing Monday December 5th, a liquidation sale will commence here at the Game Keep offering modest discounts on our remaining inventory. As the sale progresses through the month, the discounts will increase. Customers are encouraged to purchase early, as these items will NOT BE RESTOCKED. All merchandise, including gaming terrain and the store equipment will be sold.

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