Monitoring game play in arcades is one way supermarket retailers will decide what hot titles to stock this holiday season.
ine the proper mix of formats, copies per title and pricing.
SN polled retailers and distributors and asked about their plans to balance games with video sell-through purchases this season. Especially in light of this season's megasell-throughs that will require investment in volume, what are supermarkets budgeting for new games? Here is what they had to say:
Jodi Tyler video specialist, corporate
Roundy's Pick 'n Save Stores Milwaukee
For the fourth quarter, with Mortal Kombat II, we will probably order three copies per store. Normally we just order one copy per store. I stay close to my budget. Something like a Mortal Kombat II is worth going a little above budget. Other times of the year, we stay in line with the budget because we are looking for return on investment.
We may need extra copies of Mortal Kombat II. Kids will be out of school for the holidays, so they may want to take a game out for two or three nights instead of one.
There are virtually no 8-bit games. We still carry a small supply of basically older games that people can't get. The ratio of Sega vs. Super Nintendo titles depends on the area. Stores up in Sturgeon Bay, Wis., do real well with Super Nintendo. In the Milwaukee metro area, the mix is 50-50 Sega and Super Nintendo. In Monroe, Wis.. it's Super Nintendo. In the Brookfield, Wis., area, you see the Sega CD and Sega. The mix differs by store. We carry both in all stores. We always have something new in both those formats, but there might be a better selection in one vs. the other.
We offer 500 to 1,000 video game titles per store and customize the mix by store. The corporate stores charge $1.98 for one day's rental. There is a higher concentration of 16-bit games and a decrease in the number of 8-bit games carried. Video game rentals account for 3% to 7.5% of department sales.
Tom Hembree executive VP, store operations
K-VA-T Food Stores Grundy, Va.
We typically buy one or two copies of a game per store, but if a game is good enough, we may increase that number. We offer a 50-50 mix of Sega and Super Nintendo games.
About 200 different video games are offered per store. We try to budget 20% of our mix for games and 80% for movies. We increased our budget for video games from 10% earlier this year. There has been more movement in games. The games are rented for $1.99 per day.
Steve Gretzinger video coordinator
Angeli Foods Iron River, Mich.
We buy between three and five copies of a particular title per store. That will probably increase in the fourth quarter. We will be buying some to sell, so we will probably increase the number of copies per store just a little bit.
Sega CD-ROM accounts for about 8% of our mix. Sega and Super Nintendo each represents about 40% of our mix. We are just getting into IBM CD-ROM.
Each of the stores typically carries about 800 video games for rent. Sega and Super Nintendo rent for $2.50 for one night, $3.50 for two nights. Regular Nintendo rents for $2 for one night, $3 for two nights.
We also sell both new and used games. We buy, sell and trade. The rental of video games amounts to about 12% of video department sales, but combined with sell-through game sales, represents about 14% of department sales.
Our mix is being adjusted to include fewer of the regular Nintendo and more of Sega CD-ROM, Super Nintendo and Sega. Sega CD-ROM has the biggest excitement behind it. We just got into the Sega CD games last year. Each of the three stores carries close to 40 titles in Sega CD.
Andy McPheeters nonfood buyer and merchandiser
Stanley Stores Bay City, Texas
The number of games we buy per store varies by game and its guesstimated success. Super Nintendo is the only format we carry right now.
We offer about 15 to 25 different titles, depending on department size. The rental fee is $3.78 for three days. Video games account for less than half of 1% of video department sales.
Sandy French video coordinator
Thrifty Food Stores Burlington, Wash.
Our mix is about 50-50 Sega and Super Nintendo. On a really hot game title like Street Fighter II, I will probably order two or three copies per store. For the rest, I try to stick with just the triple A- and AA-rated games because we are on a budget.
Our average store carries 200 to 300 different video games. They rent for $1.99 for one day or $5 for three days. The percentage of department sales from video games varies by store, but averages about 20%.
We are doing well with selling used games. We have made our profit on the rentals, so whatever we get for them when we sell them used is sheer profit. The 8-bit games are on the way out, but some are still carried for people who still have that equipment. On a monthly basis we may bring in only two or three games that are regular 8-bit, vs. eight to 10 Super Nintendo and Sega games. There is still a race between Super Nintendo and Sega.
Matt Dillon video director
Boogaarts Food Stores Concordia, Kan.
This division serves about 23 stores, all with video departments, some as large as 600 to 700 square feet. The stores offer as many as 150 to 200 different video games. Our video game business is mainly rental. Rental rates range from $1.99 to $2.99 for three days. Rental income from video games accounts for 20% of video sales.
We have been in 16-bit games quite a while and have a pretty large inventory. We are selling off the 8-bit games. There are a lot of new games, including 32-bit. By the end of the year, we will have a greater selection than we do now of 16-bit and there is a good possibility we may have CD-ROM on a test basis in some stores.
Clifford Feiock video coordinator
Nash Finch Co. Minneapolis
The stores we supply offer from 50 to 350 different video game titles. Rental varies by market area, from $1.50 to $3, usually for two days. The more successful retailers are achieving 10% to 11% of video department sales with video games. We have been phasing out the 8-bit video games. We have Super Nintendo and Sega Genesis.
Rick Ang director, video operations
Bel Air Markets Sacramento, Calif.
On a stock title, we would buy two or three per store. On a title like Mortal Kombat II, we would have to buy at least 10 per store. That type of game creates as much excitement and activity as any new video movie.
We carry from 300 to 1,200 different video game titles per store, with the average about 400. New releases rent for $2 a day and catalog games rent for $1 a day. Games represent 20% to 30% of video department sales.
We have been trying Sega CDs about a year and a half. They seem to have kind of leveled off. We are looking into some of the interactive CD-ROM games coming out. This looks like a good year for gaming. Sega's new 32-bit insert is coming out. By now the market is saturated with game units. Rentals should be picking up during the holiday season. With the cold weather, our business picks up quite a bit. Our mix is 60% Super Nintendo, 40% Sega.
Cindy Seale general mgr, video operations
Jitney Jungle Stores of America Jackson, Miss.
We offer 10 to 15 different games at an average rental fee of $3 for two days. Video games are carried in 15 to 20 of our 46 stores. They represent only a small percentage of video department sales, a maximum of 5%.
We have carried regular Nintendo. That is kind of dying off. Now we are carrying Super Nintendo and Sega. It looks like Sega is getting even bigger. We have not invested a great deal of money in the game category, but we are definitely getting a return on our investment.
Midwest grocery wholesaler
We will probably increase the number of games we offer in the fourth quarter. Typically, we buy one to two copies of a game for each store. About 150 stores are in our game rental program.
All our games are either Nintendo or Sega. Nintendo has a slight lead over Sega in number of titles carried.
small Southern chain
We generally order several copies of a game per store, depending on the title. We may have to order extra copies for the fourth quarter when rentals increase.
We still have some regular Nintendo games for those who have not upgraded their equipment. Otherwise, about 60% of our games are Super Nintendo and 40% Sega.