Retailers look for more of videogame pie

VPD conference covers marketing, merchandising

By Susanne Ault -- Video Business, 8/14/2008

AUG. 14 | FOLSOM, Calif.—DVD retailers learned how take to advantage of the videogame industry’s record sales during VPD’s third annual Game Summit 2008 at its headquarters here.

At the Aug. 12-13 event, VPD facilitated face-to-face meetings between Blockbuster franchisees, InMotion and others with such major game publishers as Activision, Disney Interactive, THQ and Bethesda to help boost retailers’ game merchandising. At a time when DVD is maturing, disc retailers can’t afford to ignore games, which are increasingly selling along the lines of a top DVD hit.

For example, Hannah Montana and High School Musical games have shipped more than 5 million units, according to Disney Interactive. The division expects to earn $400 million in revenue in fiscal year 2009, marking a 60% jump from the prior year.

“There have been quite a few milestones this year with Halo 3 and Grand Theft Auto IV, where the numbers are bigger than a lot of movies,” said Andrew Craft, VPD Games general manager.

Noting a widening fan base for gaming, Craft added, “The demo is not what it used to be, where it’s not just for 13- to 15-year-old boys. There are a lot of women now—my mom plays the Wii.”

The wholesaler has tripled its gaming distribution business over the past three years, according to the company. VPD also services a number of game-centric retailers, such as Play ‘n Trade.

John Sanders, product and operations manager for Kansas’ 44-store Blockbuster franchisee chain Major Video, came to this year’s VPD event for the first time because of gaming’s climbing popularity among customers.

“This is a growth area of the business, and we want to put more of a focus on that area,” said Sanders. “We want to inform the customer that Blockbuster is the place to go for games. We might do that through more signage or place [some titles] in higher trafficked areas.”

Sanders’ gaming strategy comes on the heels of a number of Blockbuster corporate stores ceding new release DVD space to game titles. Previously, gaming was corralled separately from DVDs, but now the two products are residing together at these Blockbusters’ most visible new release wall.

Earlier this year, InMotion Entertainment began to redesign its stores to expand space for high-performing games and reduce displays for weaker selling CDs by about 25% to 30%.

“We have made a major merchandising commitment to games in the past year,” said Steve Torr, director of software purchasing and rental services at InMotion.

Counting these store revamps, InMotion’s 52 airport-based outlets lifted 26% in revenue on a comparable store basis in July over the same month in 2007, said Torr.

Retailers were pleased to learn that publishers will be supporting their heightening game categories with multi-million-dollar marketing campaigns on the scale of studio’s extensive fourth-quarter DVD blitzes. Stores were informed about $13 million and $10 million consumer campaigns for Bethesda’s Fallout 3 and Disney’s Pure, respectively. Car racing game Pure rolls out in September, and soldier role-playing game Fallout 3 streets in mid-to-late October.

Store participants said they hoped to build fourth-quarter promotions that blend DVD and games, as many upcoming game titles are based on film franchises.

“With Disney product, you can do a lot of cross-promotion, where maybe you can bundle titles and offer discounts if you buy the DVD and the game,” said Torr. “There is synergy between the two.”

Disney’s Tinker Bell game will street on Oct. 28, day-and-date with the bow of made-for-DVD movie Tinker Bell.

Game publishers also want to expand the retail footprint of their games into new types of retailers.

“For some of the smaller retailers, there is that specialty feel, where they might know the product more” than a large chain store, said Tom Morris of game sales agent Watt and Company. “Small retailers can create that environment that invites people in.”

InMotion’s Torr hoped to convince publishers that its outlets were more influential than their store count might suggest. Considering typical airport foot traffic, a game poster in an InMotion window should garner 200 million impressions a year.

“A game can get maximum exposure here, so the game companies love us,” he said.

Other hot upcoming game prospects are THQ’s De Blob debuting Sept. 22 for the Wii, backed by a $3 million campaign; Saints Row 2, Oct. 14, $9 million campaign; and WWE Smackdown vs. Raw 2009, Nov. 8, $5 million campaign.

Additional film spin-offs streeting through 2008 are Activision’s Spider-Man: Web of Shadows, Bond 007: Quantum Solace and Madagascar: Escape 2 Africa; and LucasArts’ Star Wars: The Force Unleashed and Star Wars: The Clone Wars.

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