With new video gaming systems on the way again -- led by the impending entry of a new player, Microsoft Corp. of Redmond, Wash., into the market with its high-profile Xbox -- supermarket rentailers are starting to re-evaluate their game sections in anticipation of the changes.
It's a perennial task for specialists. Unlike home video, where VHS long ago supplanted Beta as the tape format of choice (just as DVD has quickly succeeded the laser disc in that medium), the video game industry keeps churning out new formats that thrive on technological advances.
The next major systems to arrive will be the Xbox from Microsoft and the Game Cube from Nintendo of America, also based in Redmond -- both planned for launch later this year. Further details about both products are expected to be released later this week at the Electronics Entertainment Expo (E3) in Los Angeles.
The proliferation of systems makes for a large, complex market. National video game sales were $4.1 billion last year on a volume of 128 million units, according to the Interactive Digital Software Association (IDSA), Washington, owner of the E3 show.
"I'd like to know more about the games market," said Greg Rediske, president, Video Management Co., Tacoma, Wash. "I tried at one point to understand it better, but it's just too much if you're going to do it justice."
As a result many specialists delegate their game purchases to those with more expertise.
Some use suppliers.
"I'm relying on Video By Cycling [Dallas] and Jack of All Games [West Chester, Ohio] to do my games buying," said Craig Hill, video specialist, Harps Food Stores, Springdale, Ark.
Others use associates.
"I work on buying games for [director of video/photo] Paul [Richardville]," said Leith Haines, video department manager at the Reasor's store in Tahlequah, Okla., the chain's hometown.
All game buyers have a formidable array of variables to consider in their strategies. And with display space at a premium in rental departments, it must be effectively apportioned to successful formats. There is no room for underperformers.
"Dreamcast isn't renting for us, so we're selling off the games," Hill said.
This move comes after a decision by the parent company of Sega of America, San Francisco, to stop manufacturing its Dreamcast console, introduced in the United States in September 1999.
"There is very little business left in Dreamcast for us," said Haines. "We didn't buy heavily into it, just for the reason that Sega has burned us too many times, and they're doing it again. They did that with 32X and with Sega CD -- they haven't followed through on one system since Sega Genesis.
"They've already stopped making the hardware, and they really aren't backing up the Dreamcast with software, either," she said. "The titles are getting smaller and smaller."
"We have almost nobody doing Dreamcast," said Rediske of Video Management.
Meanwhile, specialists are also sorting through the initial market reaction to PlayStation 2 (PS2), introduced here by Sony Computer Entertainment America, Foster City, Calif., last October.
"PlayStation 2 hasn't caught on yet for us," said Hill, "even though our game rentals are doing very well."
Haines of Reasor's said PS2 games are "doing fairly well," but she said there is a general shortage of good games. "The selection in all categories is getting smaller because all the programmers are concentrating on the Xbox and the Game Cube," she said.
While conceding that "Sony should have had more systems available for the launch," Haines also noted that "PlayStation has always been very good about following through on their merchandise. They do really good marketing -- they study the market demographics and then start hitting it hard."
According to the IDSA, last year's gamer market was 57% male and 43% female. Among most frequent video game players, 42% were under 18 years old, 37% were between 18 and 35, and 21% were over 35.
But specialists must study their own markets in particular.
"What do well for us are racing and role-playing games," said Hill, adding that even within a small geographic area there can be large variance in the demographics of his stores' customer bases.
As they examine their markets, specialists take note of current trends.
"Everybody seems to be backing off the extreme violence in games," Hill said.
Then buyers must decide whether and how to react.
"If games just have a mature rating for violent content, we carry them," said Haines. "Sexual content is another matter, though. We might consider it on a PlayStation 2 game, as its demographics are [older than] those for Nintendo."
These decisions require various degrees of advance planning, so it's no surprise that specialists are already contemplating new arrivals -- with Xbox foremost in their thoughts.
"We will probably do Xbox if Microsoft promotes it well and has the units on hand -- in other words, if it does it better than Sony did," said Hill of Harps.
Haines said Reasor's would handle the Xbox launch the same way it handled PlayStation 2, which was to bring in the games but not rent the systems.
Microsoft has so far announced only that its system will arrive sometime this fall. It debuts with a 10-gigabyte hard drive ("a first in the console gaming industry"), an Intel 733-megahertz processor ("the most powerful central processing unit of any console") and a 250-megahertz graphics processing unit ("delivering more than three times the graphics performance of other consoles").
"I think Xbox will really take off because of its strength in graphics," said Haines. "They're such an important feature."
Game Cube, meanwhile, hasn't engendered as much pre-release publicity, but insiders are reportedly expecting strong support from Nintendo in the form of exceptional game titles. Its system, which utilizes mini-DVDs (rather than the full-sized DVDs employed by the Xbox and PS2), could rack up sales if one industry rumor -- that the Game Cube will sell for $200 compared to $300 for the Xbox -- proves true.
But on another front, Nintendo is already making waves.
"Nintendo is really pounding the market with the Game Boy Advance," said Haines.
This portable deck is set to arrive June 11 at $99.95, along with 15 new game titles ranging in retail from $29.95 to $39.95. It's the next generation of a wildly popular system -- last June the company shipped its 100 millionth Game Boy, and Game Boy Color, introduced in 1998, is still the fastest-selling platform in this country.
But the format has been difficult for some rentailers to handle.
"Game Boy isn't really good for rental because the cartridges are so small that they get lost very easily," said Haines. "We tried it when it came out, but we had many problems with customers losing the cartridge, and then losing customers because they had lost the cartridge. But we may consider it in the future since the game prices are so low."
As this illustrates, specialists will continue to have their hands full as they keep weighing the many factors influencing the rental market. And their profitability hangs in the balance as they hone their skills.
