Defining the Debate

The local public radio station had an interesting program this morning about the newspaper business. Newspapers have been on the ropes, due to declining ad revenue. About half their ads come from classifieds, which now go on places like Craigslist and Monster. What I found interesting was that one of the guests talked about defining the debate.

Rather than constantly being defeatist about the industry, which is the attitude of most in the newspaper business, the guest argued that the industry needs to ask a fundamental question: Is the industry in transition or is it in decline? If it's in decline, there's no need for capital investment and there's not a lot you can do to make it better. If it's in transition, then you've got more options, you can attempt to define what you need to become and adapt. That's what I gathered from his comments and it obviously resonates with me in regards to the game trade, especially the constant Chicken Little routine from many store owners.

Is the game trade in transition or is it in decline? Many would say it's in decline. Customers who only buy online argue that they get little value from their LGS (local game store, which used to be referred to as the FLGS, friendly local game store). They feel that the LGS sells games at a "premium" defined as not the "true" MSRP of what you can buy it for online. Sell something for 30% off long enough, and that's the perceived price. Without added value, they have no use for a game store.

Game store owners, especially older ones, lament as well. If you've been running your store like a supermarket, expecting people to come in, pick up their product and get the hell out, you've likely seen a decline in sales, as you add no value. In fact, the experience of shopping in such stores is often negative. Everyone has stories about the grumpy old veteran store owner in their area or the jaded, over-pierced clerk with Technicolor hair who laughs at your game while the owner works a real job elsewhere.

These retailers were once able to buy cars and houses with cash on profits from games like Pokemon and Magic. They could sell pallets of product, rather than just a few boxes on release. This was before the Internet started filling that need at a steep discount. Others argue that the game store is dead, and we should start selling used movies and video games to survive, or transition into comics or toys for diversification. Most long timers, including many industry leaders, have a secret or not-so-secret online presence as well, making up for their sagging retail sales by joining the Internet discounter crowd. They pontificate about how to run a store while flipping cases of product on their websites. They run their stores mostly the same, but make up for it with online revenue. They consider the need for game space a debate, rather than a necessity.

I think, not surprisingly, that the industry is in transition and not in decline. There are many ways to make a store work, but the key in our urban area with expensive real estate and lots of retail choices is not diversification as much as it is the concept of a "third space."The combination game store-pet store might be a clever idea in some small, podunk town without a good game store or a good pet store, but it won't fly in an urban area with many retail choices.

As for the third space, it works like this: There's your home, there's work, and then there's the concept that your store should be that third place where people spend time. Starbucks and Barnes & Noble do this with their lounges, Internet access and snacks. The key for us in this transition is to become the third place where gamers spend time. It supports the hobby for one, and shows that you're a game community member, rather than an evil retailer, getting rich on their game purchases (as if).

Being the third place also works well with an important principle of retail: The more time people spend in a retail store, the more they spend. You can play videos, provide them food and comfy chairs, create intriguing displays, and in the case of a game store, offer a place to play for a few hours. The old timers will attempt to perform a cost-benefit analysis on that game space, but that's missing the point. The entire justification for a stores existence, with this model, is it's identity as a third place.

I guess my point is that by defining the debate, we can cut put our emotional energy into figuring out what needs to be done to transition, rather than how to plug holes in the crumbling wall. You can explore solutions rather than re-hashing the same problems.