People keep telling me the games market is in bad shape, yet we grew our UK business by 150 per cent this year. I don’t believe any other games company could do that. There is no doubt that times are tough, bad debts are up, and that cash and banking facilities are at a premium in times like this. However, we have continued to grow for a number of reasons.
The easy win is to drive quick sales via hot licences and TV-advertising, but the critical thing is getting people to play games. That is the only long-term strategy that makes sense for a games company. For the toy companies like Hasbro, Mattel, Character and so on, the toy model is the easy option – loads of TVRs, low focus on gameplay. We focus on gameplay and on getting people to play games. We only bring our games to retail once they are ready – both in terms of gameplay and consumer awareness. This reduces the risk to retailers of stocking new products. For example, we have two award-winning board games – Quelf and Flapdoodle – that we could launch in 2009 and shift tens of thousands of boxes, but that doesn’t create the next brand that retailers can rely on to deliver year after year.
The games category has been crying out for fresh news. For years it’s been dominated by extensions on existing brands, and the latest gameshows. The challenge is that brand extensions offer an ever decreasing return, and game-shows are like a roller coaster, so it’s great while they’re big, but tough for everyone to anniversary once they’ve gone. We’re focused on new ideas and fresh concepts that will deliver year after year in the future.
We are an entertainment company. We are all about delivering social gameplay by any media. We just launched a radio station, which features our games brands and known licensed formats played on air. It started as an online radio station. But now syndicated content has just rolled out to 60 radio stations, and we’re building from there. We’re also in discussion with the UK’s leading family entertainment stars to front versions of our games as Saturday night TV shows. No other games companies are doing the things we’re doing.
Many people think of us as the DVD Games company and, it’s true, we did conceive and launch the DVD Games category globally. However, we were a successful board games publisher before that and are still. DVD Games was just one simple idea that went huge. We have lots of simple, but huge, ideas. We’ve been in TV and media production for 22 years; as part of that work we were producing a radio game called Battle of the Sexes in Australia ten years ago. We published a board game off the back of that, which went bigger than Monopoly. We then took that game to the US, where it still sells hundreds of thousands each year.
Not everybody in the UK is aware that we have full distribution into US mass market distribution and are a valued supplier to Wal-Mart, K-Mart, Target, TRU, Barnes & Noble, etc. This gives our European business strong corporate and financial support, as well as a global product line to cherry pick from. We also set them free to develop products that work well locally. It’s really the perfect blend; we can work globally, regionally across Europe and locally – no other games company can compete in all those areas.
Our development team has won awards across the world. The Planet Earth DVD game has won awards in five countries so far. Licensors choose to work with us because we make great games, we understand their brands and objectives, and also because we are absolutely obsessive about getting development right. We don’t submit rubbish work and wait for the licensor to direct us – we produce what experience and expertise suggests to us is the right thing. One leading UK-based licensor has changed their merchandising brand style guide as a result of our work. The toy companies for which games are another box to slap a label or licence on don’t do that.
We have a business model based on low overheads, great gameplay concepts across different media, brilliant, passionate people, and are working really hard to provide a competitive advantage for our customers. It’s really quite simple, and for us it’s easy to make it work because the companies with the biggest brands are so inflexible, cost heavy, and inward looking.
We work openly with retailers to find out what they need, not just what we want to sell them. As an example, having heard how many UK suppliers were passing on cost increases to customers, we took the decision not to pass any on. While this gives us a margin hit, it also gives us a significant difference versus our competition, and assists customers at a tough time for them. This sets us apart from our competition.
This is a really tough time in retail. What happened to Woolworths shows just how tough it has been. So, in times like these, retailers are looking for proactive suppliers which pre-empt problems and provide solutions. That’s the jargon, the reality of that is knowing the customers’ games business as well as or, if you can, better than them. So you identify problems and opportunities in time to do something about them. It also sometimes means taking a hit yourself so you can ensure business works for the retailer.
Our customers tell us about the problems other companies create with their insular focus, instead of addressing what concerns the customer – for instance, the hard sell on ‘corporate priority’ products, as opposed to what is best for the customer, what will sell more for them and deliver them the most profit. They tell us about terms meetings which are all about what account managers are allowed or authorised to agree or not agree to. But most major national retailers have enough of their own red tape without having to jump through hoops for their suppliers as well.
The reality is that we have some great games that perform year after year. Not every game we have launched has been a runaway success, but we go back and clear up our mess when that happens so the customer isn’t dumped on. This all sounds like common sense, but not everyone does it – we do, and hence we are growing as all around us struggle to deal with these harsh times.