Exclusivity at Retail: An Inevitable Curse?
Today it was announced that Return to Arkham, a collection of both Arkham Asylum and Arkham City, would be getting a Xbox One and PS4 release. That in its self is hardly a shock, after all, there have been rumblings of such a package for quite some time. What is surprising is that in Australia the only way to buy the game at retail will be by walking into an EB store. That’s right, through the magic of corporate deals and backroom handshakes the Return to Arkham collection will only be available to purchase physically at your nearest EB store. Not at JB HiFi, not at Target and not at Big W. For the first time (that I can recall anyway) a full game, and not just pre-order DLC, will be retailer exclusive.
Now don’t get me wrong, I have no particular problem with exclusivity deals. My personal stance is that if a company wants to secure the rights to a particular product and has the resources to do so then good luck to them. If it was a good call the company that outlaid a significant amount will reap the benefits. Adversely if it was a bad call then they will have to wear the losses. Just a part of the world these big businesses exist in. This particular deal however, has raised a few red flags in my mind and I am a little worried about what it means for the future.
My first thought upon hearing this news is that EB Games has evaluated the future of the industry and realised they have not place in it. This is something that has been dawning on the company for a while and the increased space they give to things that aren’t actually games in their stores is an indication of that. With the steady march to digital EB needs to change the way they do things else they will end up on the same scrap heap as Video Ezy, Blockbuster and Civic Video. Retired to the home for franchise stores that were made redundant by technology. But in making deals like this it tells me that they are aware their demise is coming and they are trying to shore things up in the meantime.
I see this deal as EB testing the waters so to speak. After all, a re-release of a couple of games that came out years ago isn’t probably going to be a huge seller. But what they will be doing is watching how the game performs closely. They will be watching if this exclusivity deal is accepted by consumers or if they face a backlash in both sales and popular opinion. The reason they will be doing this is to gauge if chasing exclusivity for bigger releases is a feasible option. It is easy to imagine EB chasing exclusivity for the next Assassin’s Creed or Call of Duty. Franchises with committed followings and now those dedicated fans can only get their fix from one place. That is the sort of thing a specialist retail store would have dreams about. The potential gains for EB are astounding even with the possibility of a harsh backlash from consumers.
My main worry with this is the anti-consumer behaviour it could create. At the moment in Australia, there is aggressive pricing from chain department stores on new release games. This means that EB and JB have been forced to match prices and cut their margins significantly. This is great for consumers even if it could be argued that it forces smaller competitors out of the market. This aggressive pricing is being led by huge corporations that see this a small hit to bring people into their stores. I am pretty sure Coles Myer and Woolworths couldn’t care less about gaming and just see it as a way to attract customers into their premises and hope they purchase items with higher retail margins. But this has a huge impact on a store such as EB whose sole purpose (until recently anyway) is to sell games. Games are the reason they exist and if they can’t compete with the store 50m down the hall then they would go out of business quick smart.
However if they were to have some of these exclusivity agreements in place then they could set the margins to suit. No longer would they be selling these items for the barest of profit but for an amount that they could sustain comfortably. They would go from price passenger to market driver, allowing them to head in the direction they wish to go. Like I said great for EB but not so great for poor Joe Average wanting to grab Battlefield 1 for less than $100. I guess this is where I have mixed emotions about these sort of things. EB, probably seeing the writing on the wall, are trying to not only provide shareholders with a return but fight for their own survival in a world that is gradually leaving them behind. To do this they may have to take steps that possibly alienate their clientele. The reverse of this is consumers will end up having to pay more if these sort of deals become common and I know that is not something I want to see, especially in Australia which has a proud history of paying too much for video games. I don’t want to see EB close its doors, it would be too damaging for the local industry, but at the same time, I don’t want any sort of monopoly to form under their brand either.
I guess my main worry is that this becomes common and that anti-competitive behaviour becomes the norm. Occasional deals, like this current one with Return to Arkham, don’t really hurt many people. After all, most people who want to play Batman have already played Batman. The problems arrive when it is a new, highly anticipated, title. That is when we will all see the true ramifications of these sorts of exclusivity deals. Of course, this worry could all be for naught, this Batman deal could have been simply a one off, but I find it hard to believe that EB wasn’t thinking about their future when they set it up with Warner Brothers. This all leads to some point down the track where either consumers or retail will be worse off. I guess we will just have to wait and find out which of those groups it is.
Matt Hewson
