SEGA: Economic fears hit retailer stock orders

Economic fears hit retailer stock orders

The global economic slowdown is applying more pressure on videogames
publishers as retailers in the US slash their stock orders.

In a bid to limit any risk of piling up unwanted inventory - if
consumers stop buying games - all five key retail chains in the
territory have started to cut their day one orders, causing growing
concern among the publishing community.

That's according to Sega Europe president Mike Hayes, who told
GamesIndustry.biz that although Europe isn't quite in the same
position, it's another headache for the industry to have to deal with.

"Retailers, definitely in the United States, are being far more
prudent in what they buy, so they're clearly going to focus on the
triple A titles, but their day one orders are coming down," he said.
"What they're saying is that they'll take in as little as need to, see
how it sells through, and then they know they can order again in a
matter of days if not hours. So that's hurting us.

"In the United States you've got five customers, and those customers
are saying that they don't need to order four weeks' stock, I'm going
to order two. I don't want all this inventory. I think you'll find
most publishers in the United States will be having similar
challenges, to be honest.

"But Europe is such a mosaic of opportunities - while all the
retailers are being more aggressive, and we understand why, Europe's a
much more fluid and flexible market to manage, so we're in a good
position."

A fall in stock orders is the latest issue to hit the publisher-
retailer relationship, following a greater take-up of second-hand game
sales by retailers in North America and Europe as well as a push into
game rentals, while publishers look more closely at direct sales via
digital distribution.


http://www.gamesindustry.biz/articles/economic-fears-hit-retailer-stock-orders

I think they'd do much better if they dropped prices by $10. At
$49.99 you'd get a lot of those people who wait a week to buy their
games second-hand deciding to buy at retail. And the secondary market
would be smaller because the games wouldn't depreciate as quickly.

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