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Category >> games

May 03
2007

Game buys Gamestation

Posted by harry in sonyretailnintendomicrosoftgames

Wow...the big retail announcement out yesterday was that Game Group PLC, the UK's biggest specialist games retailer is to acquire Gamestation, the UK's only other significant games retailer, from Blockbuster for £74 million.

 

For those involved in the games business, this may not be great news.  Game is already a major force, taking something like 35% of the UK games market, and notorious for its aggressive trading terms - demanding 40% margins and sale or return on most products.  Could such terms, and a refusal to change them, be behind the recent spat between Game and Ubi Soft, which will see the former refusing to stock the latter's Oblivion game for PlayStation 3 - despite the game having been a huge seller on Xbox 360? 

 

Clearly, an even more powerful Game, with perhaps 50% or more of the UK games market will become increasingly able to demand whatever trading terms it requires - unless and until the games publishers all have the balls to do something about it en masse (not that we're suggesting an ELSPA cartel would be appropriate, or indeed legal).  Whispers are already going around the games industry about a possible monopolies and mergers/OFT investigation of this proposed acquisition, although this is more likely to be wishful thinking than based upon any real likelihood of a challenge.

 

Scary times for publishers - Game and Gamestation will continue to push preowned software in preference to new, such titles often 'churning' through five or more users, lining the retailer's pockets each time with nothing for those that made the game.  Whatever you might say about the supermarkets, HMV, Virgin, Dixons et al, they don't try to push second hand stock onto consumers.  Less money to the games publishers and developers and more for the retailer means less money spent developing new games...which can only be bad for gamers and the industry alike. 

 

In the longer term, of course, digital distribution will see high street retailers wither away as Microsoft, Sony and Nintendo control game distribution via a broadband link.  That's a long way off, though, and we'll see more IP-owning casualties before retail is finally taken out of the equation.

 

 

 

May 01
2007

Just Say No

Posted by harry in rantmentoringgamesbusiness development

One common theme I find when I am talking to smaller companies, particularly those involved in pitching products or services to larger ones, is that they have absolutely no idea whether or not a potential client is interested in them.

 

Why not?  Because the potential client hasn't said 'no'.  Instead, what invariably happens is that the potential client vanishes.  They don't answer emails, they don't answer the phone, they don't return calls.

 

What is this all about?  Are they trying to shield you from the pain of rejection?  Are they too embarassed to reveal to you that they're not the person you need to speak to?  Or that they're very busy this week, that their budget has been cut and they can no longer do a deal, or that they're just not interested?

 

I make it a point of telling people, when they first pitch me something, that I will tell them very quickly if I am not interested.  And I do.  And it's the right thing to do.  These people want to close some business and, if they're diligent and hardworking, will keep pushing at doors until one opens.  Give them a break - either let them in or tell them it's locked.

 

A few years back, a small startup games developer approached me to help them build their business.  They'd done multimedia work in the past, and were looking to move over to games development.  They had a bunch of demo and design work, and had spent months if not years on an engine, burning through the equity on their houses to make something really special. 

 

It was dreadful.  Clearly they just weren't the people to make a videogame (it's pretty hard you know).  They had apparently met with a number of publishers about their concept.  Guess what?  Nobody had said 'no'.  But they were proving a little elusive.  I took a deep breath and told them the truth.  It wasn't going to happen.  They were wasting their money and their lives chasing a dream.  I did it nicely, gently and politely.  I showed them the kind of products they were up against.  They admitted immediately what they already knew - they were fighting a losing battle.  I was worried I would upset the MD, a most charming and hardworking woman, and very competent in her own area of expertise.  She called me a 'superstar', and abandoned the project.  That conversation saved her losing tens of thousands more pounds on something that would never happen.  She got a job and got her life back.  Why did it take me to say 'no'?  Why was everyone else prepared to let her mess her life up?  I still have no idea.

 

So, let's lay down a few rules:

1. If someone you don't know 'cold calls' you, you don't have to call back.  Life's too short to call back everyone that thinks I might want new windows.  The same applies to spam email.  I have enough Cialis thank you.

2. If someone you do know calls or emails you, return the call.  If you're too busy to meet, or can't see that there would be any productive business done, say so.  It's not rude to say 'no'.  It's rude to ignore the call.

3. If you have met someone, and they have pitched something to you, and you're not interested in it, say 'thanks, but no thanks'.  If they keep harassing you after that, you can ignore them, but at least say no once.

 

I think the way to defeat this ignorance is to confront it head on.  If someone doesn't say 'no' to you, and you've given them three chasing calls or emails,  next time you see them ask them (and you will, it's a small world we all work in) why they didn't.  If they want something from you, politely remind them that, last time you dealt with them, you were frustrated that they suddenly went quiet, and ask that they don't allow this to happen again.  No need to be rude, this is all about eliminating that kind of ignorance.

 

We can defeat this menace together. 

 

 

 


Heldhand is a strategic, financial and management consultancy for technology and media companies.   We specialise in helping our clients survive, prosper and invest through challenging and ever-changing times.  Areas of special interest include digital content delivery, video games, advertising, and new web businesses. 

 

We advise software developers and publishers, venture capitalists, entertainment and media companies, acccounting and law firms on the sector.

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