With the launch of the PlayStation 3 (PS3) in March, there are now three consoles (two offering HD gaming to gamers for the first time) that offer a variety of sales opportunities to retailers. Keri Allan advises on how to take full advantage of them.
Both the Sony PS3 and Microsoft Xbox 360 offer HD gaming, and the Nintendo Wii focuses on other new types of gaming, especially in the multiplayer field. Sadly margins are very low for retailers when it comes to the hardware itself. For example selling a PS3 will generate as little as a 5% margin for most retailers, but with the plethora of peripherals and accessories available, you can expect at least ten times this. Considering this, if retailers stock and highlight the variety of gaming accessories available, these higher margins could lead to lots of additional money for stores. Plus, these products almost sell themselves.
As Nikki Willcock, UK and Ireland marketing manager for Logitech says; “The gaming market is enjoying a great time; the consumer awareness and demand is high so it’s natural that retailers should try and make the most of consumers being in their stores.”
Neil Drain, MD of distributor Lawton, summs up the situation: “Accessories have always and will always give better margin than the products they compliment in consumer electronics, and the gaming market is no exception. Cables, adapters, chargers and even ancilliaries, such as headphones, regularly make more bottom line profit than selling the console or the software. Better still, they don’t go wrong, won’t be brought back because little Johhny didn’t like it, and certainly don’t go out of fashion as quickly.”
Growing opportunities
These latest consoles are very technologically advanced, for example both the Xbox 360 and the PS3 are supporting the next generation DVD technology by allowing users to play HD-DVDs (Xbox 360) and Blu-ray Discs (PS3); although you must buy an add-on player for the 360. But as the hardware market evolves and matures, so too does the accessory business. No longer are we dealing with just controllers and memory cards; the variety of add-ons continues to grow, fulfilling any player’s specific needs.
With the growth of multiplayer, of course, third party controllers are still a big sales area, however thanks to voice-enabled online gaming, there’s also a demand for headsets; and video chat abilities also mean cameras. Then there are peripherals for specific types of game; such as the racing wheel, chargers for the wireless controllers and even screens and speakers for consoles, so they can become more portable machines.
“We sell a range of portable gaming monitors which negate the need for a TV set, 2.4Ghz wireless controllers and many more products which truly push the envelope. We like to believe that we offer products both unique and innovative which set us apart from the competition and even in many cases the format holders themselves,” says Alex Verrey, pr and communications manager, Joytech Europe.
Moving away from the ‘game-specific’ market, there’s also a growing number of ‘accessories’ which can be sold as console ‘add-ons’ and cross sector lines as they have an overall usefulness across the whole home entertainment market.
For example, consider the growing number of control centres. These are great for people with multiple consoles in their home, or too many home entertainment devices, and not enough TV inputs. These ‘centres’ allow users to connect up to often five or six pieces of AVi equipment to just one input on a TV/display or hi-fi, and usually have a wide selection of inputs, catering for RBG SCART, SVideo, Composite Video, Component Video, and even Digital Optical 5.1 Audio. Simply by letting consumers know that the centres simply connect a single lead to their display or hi-fi, removing the need to plug and unplug equipment ever again, should see these products fly off the shelves.
Some control centres even take things a step further, by supporting online gaming. For example Joytech’s model features three Ethernet Ports, for use with Xbox Live and other online compatible consoles or services. “Our range of ‘Control Centers’ are one of our most popular and best selling lines. They allow console owners to connect multiple pieces of AV equipment to a single input on their TV and hi-fi, and represent true state of the art technology,” Verrey of Joytech Europe states.
Large opportunities
Retailers should also keep in mind that with digital convergence now taking place within this generation of consoles, a lot of their currently stocked consumer electronics range of products and accessories will start to achieve a greater focus from this market, and can lead to further sales if highlighted to consumers.
A prime example of this is with the new PS3 and its integrated Blu-ray drive. Despite this technology being incorporated into the console, consumers require a flat panel HD-ready TV to maximize this technology, and this is where gaming accessories have mixed into AV.
When talking with customers about their interests and needs, you may even find that a gamer is lacking an HDTV and make a large sale there. This is a rare opportunity but it still shouldn’t be overlooked. A bigger area, however, is that of leads and cables. Many consumers are still confused as to what exactly they need to garner the best HD image; be it from their Sky box, DVD player or next-gen console, and so retailers have a great opportunity to sell up consumers to the top range of leads.
HD necessities
“With gaming now moving firmly into the HD domain, I would definitely encourage retailers to focus on the key accessories that are required to maximise HD experience,” explains Paul Davey, product manager audio video at Vivanco. “Most important of all is a HDMI lead, the only lead that will allow full HD audio and picture to be delivered to the HD-ready screen. Our Prowire range of cables is the perfect match for any gaming console – a high quality cable that maximises signal quality.”
“With the PlayStation 3, I believe that retailers have the greatest ever opportunity to maximize their profits through the sale of a cable,“ agrees Verrey, Joytech Europe. “The PlayStation 3 is a high definition behemoth, capable of astonishing graphics and playback of Blu-ray movies, yet Sony are not bundling the console with a lead capable of outputting high definition information. This in my opinion is akin to purchasing a £500 bottle of wine and drinking it from a plastic beaker!
“A PlayStation 3 high definition cable is not an accessory, it’s a necessity which means that retailers really should be able to achieve a sale of a Joytech HDMI or Joytech Component Video Cable with EVERY console sold. It’s a remarkable opportunity and really one to miss at your peril. Education is key here.”
HDMI, Component and Optical are just some of the many leads that will help to deliver incredible sound and images for anyone with a HD-ready screen, and should always be highlighted when making a console or TV related sale. People will be more than happy to spend more money on a good quality cable having just spent £400 on a games console and £1,000 on a flat panel, so keep this in mind.
AV furniture opportunities
And then there is yet another possible sector to focus on; that of AV furniture. The majority of next-gen gamers will either already have or want a flat panel TV, and so you can highlight the variety of stands, mounts and brackets, which could lead to further sales still.
“Flat panel sales will also increase with the arrival of next generation games consoles, and as a result retailers should look at stocking wallmounts and AV furniture to maximise their profits. Our new range of IC wallmounts offers a comprehensive range of solutions to mount flat panel TVs in various positions to help provide a better gaming experience,” says Paul Davy, product manager at Vivanco.
“Retailers should be getting geared up for the PS3 launch – this will bring new consumers and renewed interest across the board. The huge advantage that retailers have is that they can show an array of products, perhaps with live demos or PoS that will interest the consumer,” advises Willcock, Logitech.
“In terms of sales advice my only comment would be to encourage dealers to set these products up in store and show them working with the consoles,” agrees Davey, Vivanco.
Although retailers may not be able to stock the whole range of console accessories, they should consider offering a selection of the most popular products. Depending on their base and customers, Verrey, Joytech recommends the following; “(What they should stock) depends upon the retailer in question, their target audience and indeed how much shelf space they have to offer,” he says. “A retailer which specialises in hardcore and advanced technology may well want to look at the range of Control Center products, whereas a more family-orientated specialist may look to pursue our range of Wii or handheld gaming products which typically retail for a far lower SRP.”
