Background Story
Founded as Babbage’s in Dallas, TX in 1983, was purchased by Barnes and Noble in 1999, and merged with Funco, Inc. in 2000 still under Barnes and Noble. GameStop separated from Barnes and Noble/Funco in 2004 and acquired EB Games in 2005. In those short 22 years, GameStop grew to have 4,490 retail stores worldwide and own 21% of the $11.5 billion gaming market in USA (+11% of the $9.6 billion worldwide markets). The gaming market includes software, hardware, accessories, and merchandise for PCs and video game consoles. While retail PC game sales have steadily declined since 1998, video game/console sales have continued to increase with competitive differentiation apparent in the game categories, console styles, etc. On
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They will readily shop at the competitors, valuing convenience and price point most of all. They respond to store promotions and strong holiday advertising campaigns, especially for new games/releases. Chatterjee and Yee (2012) discovered that while the devoted gamers make up 41% of the total gaming audience and 52% of the revenue from video games and systems, holiday and next generation consoles/games drove most of the sales and account for 38% of GameStop’s sales, thereby making the Seasonal Gift Giver a critical customer market to target. With the target markets and each customer’s key drivers identified, we now take a closer look at the how GameStop has differentiated it’s value chain, pricing strategy, trade-in process, and marketing campaigns.
Value Chain & Pricing Strategies
GameStop is familiar with its consumer base and tailors its value chain to provide a differential product in the marketplace. Game Stop can provide a singular experience to consumers through having a single stop for customers to cover all gaming needs. GameStop provides this differential experience through its staff, gaming publication, extensive inventory and marketing that leans on internal products. Game Stop extracts value from each business area not only to grow sales, but also for sustainability. New hardware and games are offered at the store and online. New system and game sales will peak when a new product is being released, but
After the acquisition of EB Games, GameStop rose as the leading video game retailer in its industry. In an effort to sustain their position, GameStop will have to tackle several technological and sociocultural issues that have arisen from its competitive environment. The strategic objective we wish to accomplish in this analysis is to formulate a viable strategy that will continue GameStop’s growth in the industry to remain as the go to video gaming store for the video gaming enthusiast.
Partners David Greig and Angela Peck are considering opening a new business in London, Ontario named Beyond the Bean (House, 2013). Beyond the Bean would be a unique cafe where users could eat and drink while playing a variety of sit-down games and was inspired by a visit Greig made to a wildly popular location called Snake and Lattes in Toronto, Ontario (House, 2013). Greig’s vision for the new business was a place where people could get out and have some fun in a fairly unique way without having to spend too much money (House, 2013). However, various factors of this concept must be analyzed in order to determine how to best execute Greig’s vision.
The company's Babbage's Etc. subsidiary (renamed GameStop, Inc.) acquired video game retailer Funco for $161.5 million in 2000. In 2001 Barnes & Noble joined barnesandnoble.com in acquiring a majority stake in magazine subscription seller enews.com.
Next, we selected entertainment over competition for buying behavior. Although 401 Games sells magic and items for gaming competition, the best-selling items are for entertainment. According to Exhibit 1: Breakdown of Sales by Product Category, 401 Games top sellers include board games with 30% of total sales and card game sets with a total of 20% of sales, which are both in the entertainment category. They together make up $300,000 worth of revenue. Adults, couples, or families with children will be the ones purchasing good board games or card games to play on game night for entertainment, especially families with children because it is cheap family fun.
Target’s business-level strategy is one that does not strictly focus entirely on one plan to gain a competitive advantage over competition. It encompasses various strategic and meticulous planning and decision making that is implemented in order to position the company at the top of the retail industry. With competition from the likes of Wal-Mart, Sam’s Club, and Costco, Target uses several clever and “out-of-the-box” ideas to attract consumer attention and ultimately increase market share within the industry. Most of the company’s ideas centered more on the differentiation of products and services provided to customers than lowering prices. For quite some time, the company’s plan was to not compete head-to-head with Wal-Mart in terms of lowering prices but instead to provide their customers, who they identify as “guests”, with a special experience every time they visited a Target location. One idea that was implemented was to market and sell upscale, trendy clothing and unique merchandise at discounted prices.1 This strategy, known as the “cheap-chic” strategy, focused on providing good quality clothing from various well known designers and fancy products from high-profile manufacturers for prices lower than their competition. This plan was vital because it began essentially began the concept of customers referring to Target as “Tar-zhay” which according to Patrick Barwise and Sean Meehan, who are university professors, as a “connote its trendy sensibility”. Target
The market for board games has seen annual increases of 10-20 per cent over the last decade, leading some to suggest we are in a “board game renaissance” (Carlson, 2013).
Team 2 has researched and completed a comparative analysis of Mattel’s supply chain design and related costs with that of its major competitor Hasbro and the toy industry. What follows, is a brief background of Mattel’s traditional (non-electronic game) sector, its key competitors and Mattel’s use of supply chain management concepts in addressing the competitive landscape to gain a competitive advantage. The global toy and game market grew by 7.2% in 2007 with a value of $106.1 billion and by 2012, is forecasted to have a value of $126.2 billion, an increase of 18.9% over 2007. The toy market is divided into three primary sectors, namely game consoles, game software and traditional toys and games. Traditional toys and
Consumers spent $1.1 billion on new physical games and consoles at U.S. retailers during the five-week period from Aug. 31 to Oct. 4, 2014, according to industry-tracking firm The NPD Group. That is up 2 percent from $1.08 billion over a similar period in 2013. The year-long growth of new-console sales is making up for lackluster video game sales.
EPOC will gain more profit if it is console-enabled only, when compared with PC-enabled only. The retail sales console game is almost five times more than PC game as we can see from Exhibit 8 in this case. The retail sales of console software game is 6.6 billions of dollars, but PC is only 0.9 billions of dollars in 2007. Moreover, from this exhibit, we can see that the number of PC software game retail sale is decreasing year by year, from 1 billions of dollars to 0.7 billions of dollars in 4 years. Most of consumer purchases a
3. What are the key success factors in the video gaming industry today? Are these the same as in the past?
The recent recession has hurt the entire retail market and regaining profits will be a constant challenge for the entire industry. In order to remain competitive, Ann Krill states,” value and versatility have become very important. She needs an incentive to shop.” (Hymowitz, 2012) Ms. Krill goes on to say,” I think in uncertain economic times, value becomes more important...” (Hymowitz, 2012)
Gamers are a smart bunch of people. They know where and when to shop for their games. However, the selection is so huge that specialization in the gaming world is bound to happen in terms of stores. If you look at Steam, nearly 40% of the games in the platform never get played. Therefore, new ways of shopping for games will appear, focusing on things such as Indie gaming.
Finally new online companies are creating new games that do not need a console so they can be played easily, anytime and anywhere. This factor affects our sales dramatically because our product might be seen as old fashion.
We have received the request to evaluate the current management system and practices of Game Shop Inc. We have taken actions to identify problems and the areas of improvement based on the information provided. Our team has concluded maintaining a good reputation in the industry is a critical success factor for Game Shop Inc. because this industry is an oligopoly and anything that affects your reputation would affect your reputation with all members of the video game industry. We began by analyzing the current billing system. Past errors in the billing process
The video game console industry is a very competitive segment. This segment requires a keen eye on product development as well as strategic product marketing and a rather large logistics arm to ensure rapid distribution to targeted areas. Video game industry in the US, which is hugely driven by retail sales of software and hardware, registered revenues of USD ~ million in CY'2012. Even so with the advent of new video game players in the industry, the revenues decreased by 11.7% compared to