Game Group Reveals New Strategic Shift, Expanding Web Presence

UK video games retailer Game Group has unveiled its 'Dedicated to Gaming' strategic update, including plans for "a dramatic increase in online and digital revenues". In a video interview with financial broadcaster Cantos, Game Group CEO Ian Shepherd outlined [registration required] the five specific areas in which the company will be making changes. The retailer is looking to expand its web presence, rolling out a new website soon that will "deliver a much richer community experience for our customers online". Customers will be able to review games for others to read, write a blog on the site and download content for the games they are interested in. Game Group is hoping to triple its revenue from web and digital sales by 2013 with these changes, by "delivering services to customers like buy online and collect in store, or buy in store for delivery later, which are things that a pure online competitor just can't do." The retail stores will also be redesigned, selling a broader range of games and gaming products, "including products that you can't buy from anywhere else". When questioned about whether there was a risk that developers might start selling to consumers directly and cutting out retailers, Shepherd responded: "My attitude to that is, if a developer can sell directly to customers more profitably than they can sell through a retailer like Game, then they should." However, he noted that "the fact that we sell lots of different products, the fact that we have scale, the fact we have millions of customers visiting us every day, should mean that we can go to a games developer or a publisher and say; 'we will sell more of your products than you would otherwise." "We can make your product famous in a way that you couldn't otherwise. And we do that in return for a share of the margin." Game Group recently started selling Xbox DLC in-store as part of a six-month trial period. The retailer hopes that those consumers who do not have access to a credit card or Xbox online functionality will choose to shop with them. This strategic update comes in light of the company's decline in sales for 2010. Used game sales continued to grow, however, as the category accounted for 25 percent of the retailer's sales for the year, up from 21 percent in 2009.