Wednesday, October 1, 2008

Fancy Hotel Room

Modern game stores have been compared to bowling alleys, their core strength their ability to host games in the store. I see our store more as a hotel, with the game center a fancy hotel room that needs filling with paying guests each night. One of my jobs is to book guests into this space on a regular basis, but since we don't actually charge for the space, it's really about enticing people to come, and hopefully spend money. This indirect sales model works well for us, boosting our sales substantially. Other stores do charge for this space, especially in lower income areas where the proportion of freeloading customers is much higher. You can argue that non buying users of this space add value to those who buy, but only in small ratios.

Coming up with a rate for our hotel room is difficult. If I just took the rent and utilities, it would be about $128/night (in sales). However, like hotels, the desire to use the facilities is not equal throughout the week, and many events might bring in people but no direct sales. Getting a solid income generating event in on a weekday is difficult, and a lot depends on the type of gaming. Sitting back at home and remotely looking at a low sales number, I might be surprised to find that the night before, the game center was filled with role-players. It's not that role-players don't spend money, it's that they generally don't spend money during events. You're essentially using your event space to support all the RPGs, miniatures and dice sold throughout the month. There's nothing about a role-playing event that makes the participant think you would be better off if they had one more role-playing book, right this moment (although dice sales go up).

There are other indirect revenue generating events like this, and the key is to keep them off the hot nights that generate direct revenue. Hotels do this by raising rates. If I were charging for space, I might charge $100/night during the weeknights, but $198 during weekends when the demand was strong. Role players are like the business travelers of the game store. You need them, you want them, and you entice them, but they need to be kept away from premium time slots in some way. Since we can't charge higher rates, we do this by scheduling high demand, revenue generating events in the stronger time slots: anything hot and collectible (Magic), army based miniature gaming (40K), and special events like auctions and releases that bring in a lot of people. Indirect sales events are relegated to the weekdays or off hour weekend days.

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