With HMV entering administration we’re faced with the loss of the biggest high street entertainment retailer in the UK. If the administrators fail to save the company in any capacity then almost 4500 people lose their jobs, and we as consumers lose choice.
HMV has found itself in this situation because of the company’s failure to adapt quickly to an ever changing market. A market that is suffering from a drop in consumer spending with game market spending falling 17% while total entertainment sales fell 12%.
Of course the current financial climate has led to many people, including myself, cutting back on buying entertainment to instead concentrate on the essentials. However, if HMV shuts those numbers could look even worse next year due to a lack of outlets, and awareness of products.[drop]Let’s first see how the potential loss of HMV affects the consumer. Right now I can count the number of well known entertainment retailers other than HMV on one hand, those being GAME, Blockbuster, Zavvi, Shopto and Amazon.
Play is no longer on that list as it is moving away from the retail business.
What keeps prices low is competition and losing a major competitor may affect prices. With the loss of HMV consumers are down to two big entertainment retailers in town centres, though those who like buying music CDs will have to try and find the rare independent record stores.
Or switch completely to online shopping.
Online shopping is becoming a bigger presence, and many will simply jump to that. Digital downloads are also on the rise, and in 2012 they topped £1bn sales for the first time. However, when it comes to games digital downloads only aren’t always the sensible option. There are download caps to consider, slow internet speeds in some areas and the occasional ludicrous pricing (right now DmC is £49.99 on the PS Store). You also have to remember that some may not have internet access.
What about the games industry then? The industry spends a lot of money on advertising products but even then the advertising campaigns are almost always for the big blockbusters. Other titles may gain awareness just because a person picked up a case off the shelf and decided to give the game a go. I know I’ve done that with a few titles, and I’m sure others have too.
GAME may fill the gap in raising some awareness but losing HMV means losing a lot of shelf space. With a market that has shrunk, and less outlets for consumers to find products game developers and publishers may think twice about investing in riskier titles, instead going for the safe bets. Lots of games have released with little to no marketing (Singularity springs to mind), and sales really only made because people saw it on shelves and took a chance.
Even then that isn’t enough to recoup losses on some titles.
As members of the games media we can only do so much to bring you, our readers, information about new and interesting titles. Hundreds of titles will fall by the wayside simply because we don’t have the time nor resources to cover them all. If we can’t keep track of all these games then how is the regular consumer going find new titles without actively looking for them?
In my opinion if HMV closes its doors then the entertainment market as a whole is going to suffer. Maybe if worst comes to worst I’ll be wrong, which would be a good thing. But if I’m right then sales in the UK will fall again leading to less variety in gaming due to lost revenue.
We’re at a stage where it’s too early for a digital only market, too late for traditional high street retail practices, and a market with too few competitors.