Not All NATM Retailers See Value in Carrying Videogames

DALLAS -- A growing number of NATM Buying Corp. retailers are expanding their product offerings in videogames. But a few at the association’s conference last week told us they have no plans to expand their small assortments in the category, no interest in carrying videogame products or no interest in carrying videogame software, at least in their stores.

Boscov’s doesn’t carry any videogame products and has no plans to, Ed McKeaney, executive vice president of its home division, told Consumer Electronics Daily. The main reason is that the margin isn’t enough, he said. And the company doesn’t want to devote space to the software, he said.

ABC Warehouse carries videogame hardware but not software, Executive Director Dan Schuh said. The company never carried movies or music, either, because “our business has always been the hardware business,” he said. There’s “plenty of places to buy the software,” he said. “We just don’t have the space to allocate to it” in ABC stores, said Buyer Al Warren. The retailer sells a very small selection of games and game accessories at its website. It’s selling only the PS3, Wii and Xbox 360 in its stores, not the handheld systems, Warren told us, but it’s selling the Nintendo DSi at its website. ABC tried selling the PSP, but customers didn’t show much interest, he said.

R.C. Willey carries a limited number of videogame products in its stores for customers’ convenience and has no plans to expand the selection, said Lorne Schmunk, vice president of merchandising. But he’s excited about the category because he believes it will help boost 3D TV sales, he told us. R.C. Willey stores are using PS3 games to help demonstrate 3D, he said. Like most NATM retailers, it gets its game products through distributors, not direct from manufacturers.

BrandsMart U.S.A. has been in the videogame business for years, but President Michael Perlman told us, “I expect that business to go away in the next three to four years” as publishers shift to online game distribution. There will be no point carrying the hardware if the software business goes away, he said. But “I still like” the game business for now, he said.

Expanding videogame offerings attracted new customers, especially younger ones, to P.C. Richard & Son stores and allowed the company to stop sending customers to other stores to buy games, President Gregg Richard told us (CED Oct 1 p1). Electronic Express is expanding its videogame assortment (CED Sept 30 p3), and so is Abt Electronics. It’s “a great traffic driver,” even if it’s not a great profit generator, said Abt Vice President Billy Abt.

Cowboy Maloney’s Electric City hasn’t carried videogame products, because it’s hard to make a profit on the business, President Edward Maloney said. The company “may start selling” videogame hardware, software and accessories online as part of a new e-commerce effort, he said. “We're working on it now.” Maloney hoped to make the products, along with the other categories that the retailer carries, available for purchase online “within the next month,” he told us. The company’s website now is only an informational resource for customers.

Nebraska Furniture Mart has been in the videogame business for years and continues to see value in the category, said Mark Shaw, electronics division merchandising manager. Overall videogame revenue and unit sales are “up double digits” this year, he told us. The company is making “good, steady” if not “overwhelming” sales for the new PlayStation Move motion-sensing control products, he said. Customers are buying Move bundles now as opposed to standalone Move accessories, he said. It helps that there are no supply constraints on any game products, he said.

Conn’s has carried videogame hardware, software and accessories for a few years, President of Retail David Trahan said. It’s “very tough out there” now for videogames, as for other categories, he said. One reason it’s hard to compete with GameStop is used games, he said. But he told us Conn’s is “looking very hard at” entering the used game business. It’s “a new model,” and “where the profitability is” in the category, and “we have to look at everything now,” he said.

Some NATM retailers are looking forward to the arrival of the Nintendo 3DS in March, but Shaw said he doubts that many handheld gamers will be in a rush to buy it and enter the stereoscopic 3D space. It’s a “nice” product, he said. He predicted that the adoption of stereoscopic 3D by console gamers will be slow. The Nvidia solution for 3D PC games that has been available awhile is “compelling,” but few consumers have expressed interest in it, he said.