ORLANDO, Fla. -- Profiting from the video game business has become a lot harder in the last two to three years.
Once, it was a simple category and supermarkets with video departments made good money renting 8-bit games. Then came the two incompatible 16-bit systems, and there were three types of software to buy. Now there are three advanced-generation platforms -- all incompatible -- while games for the older systems still rent occasionally. In addition, retailers must consider the sale and rental of CD-ROMs for computers, and on the horizon are new technologies like digital videodisc-ROM. Internet use is also taking an increasing bite out of the time consumers have available to play games.
Looking ahead to the fourth quarter, retailers participating in SN's video roundtable see good potential for electronic games, but said it is anything but child's play. Unlike movies, it is an area few video executives have any direct knowledge of, relying mostly on distributor recommendations.
"It is probably one of the hardest categories to manage. There are no street dates," said Sharon DeSordi, video buyer/merchandiser at Grand Union Co., Wayne, N.J.
Prices of the new systems, Nintendo 64, Sony PlayStation and Sega Saturn, have been slashed to under $150, giving a big boost to the market. But even as retailers come to grips with this fast-changing category, there have been supply problems with the most popular titles.
"The biggest frustration now is that you've got these systems out there, but there aren't enough games," said Tom Carton, president and chief executive officer of Buckeye Entertainment Corp., Dublin, Ohio, a Blockbuster franchisee with three leased-space video departments in supermarkets of Big Bear Stores, Columbus, Ohio.
As far as CD-ROM, retailers like Grand Union and Dierbergs Markets, Chesterfield, Mo., are beginning to test the waters.
"We are being very cautious with the product, but I think it is a major step. It's a phenomenal business. We should have a part of it, but it is going to go through its learning curve," said Desordi.
"Sales are going very well," said Jamie Molitor, director of video operations at Dierbergs, adding that CD-ROMS were being sold from spinner racks in the book department.
