Game Starts Playing – The Revival of Media Product Stores

A global trend has emerged of media product stores experiencing a decline in a majority of markets. With the introduction and aggressive growth of internet retailing, store-based distribution, apart from in the grocery channel, has suffered, with media product stores being no exception. The share of video games sold through media product stores has been in constant decline. This is due to stores having to price match internet retailers, while the convenience of internet retailing has grown thanks to the mass penetration of smartphones and tablets. This has led to some major retailers entering bankruptcy. However, a new partnership between Game and Microsoft may pave the way for the resurgence of the media product store, albeit in a new format. Euromonitor International recently visited this new and innovative store format, opened in London on 20 June, to see how it will fit in with the new and ever evolving retailing landscape.

Value Share of Media Products Stores in Video Games, %, Rsp, Selected Markets

Value Share of Media Products Stores in Video Games, percent, Rsp, Selected Markets

Source: Euromonitor International

Many major markets have seen a gradual decline in share for media product stores. 2012 saw the share of media product stores in South Korea plummet to 1.2%, registering the sharpest overall decline over 2007-2012. This can be primarily attributed to South Korea having one of the highest levels of internet penetration, at 84%.

The channel in the UK also posted a sharp decline in 2012 of around five percentage points, now accounting for less than half the share it enjoyed in 2007. Internet retailing is responsible for cannibalising sales of media product stores in the UK and is the fastest growing retail channel for video games in the country, reaching a 47% share in 2012. The internet has proved the most convenient method for activating subscriptions, downloading games and purchasing new software and hardware.

The resurgence of the media products store

Shoreditch in London is now home to the first console manufacturer store of its kind. In a unique partnership between Game and Microsoft, an interactive hybrid store has emerged, consolidating both play and purchase. The store focuses on educating consumers as to what kind of gaming technology Microsoft has to offer, using the outlet as a PR conduit to enhance various products and stimulate consumer interaction. In the shop, consumers are able to play different video games using different Microsoft products, while also being able to speak to experienced staff with regard to gaming tips. Employees promote the store as an experienced-based retailing space as actually using a product is the best way of demonstrating its functionality. Parallels can be drawn with traditional toy stores such as Hamleys, which uses live demonstrations to interact with the public in order to transform its retailing space into an amusement park-style shopping experience.