SPEEDING THE GAMES

DAN ALAIMO

There are too many old 16-bit video game products in supermarket rental inventories, but retailers are increasing purchases of games in the popular new formats.

That conclusion is based on SN's seventh annual State of the Industry Report, and on visits to many stores in recent months where SN found departments stocked with many more of the old, slow-moving games for rent than Sony PlayStation or Nintendo 64 games. While the survey revealed a substantial decline in game revenues -- certainly related to the inventory imbalance -- it also showed an uptick in retailers' buying plans.

"Supermarkets are responding to the resurgence of games, particularly Nintendo 64 and Sony PlayStation," said Bill Bryant, vice president of sales, grocery and drug for Ingram Entertainment, La Vergne, Tenn.

Game revenues as a percentage of overall video business have dropped for three consecutive years, from 10.3% in 1996 to 7.7% in 1997 to 6.5% in 1998. "We believe that the number for 1998 needs to be at 10%. Certainly that is very achievable provided that the right mix of video games is placed out for rental," said Bryant.

Asked what game software they carried, about the same percentage of retailers said they have the new formats as have the old. The survey did not ask about quantities. SN has observed that many video departments still carry significantly more of the old games than the new ones.

In the survey, 86.4% reported carrying Super Nintendo and 83.1% carried Sega Genesis (both 16-bit systems), while 83.1% carried Nintendo 64 and 81.4% carried Sony PlayStation (the popular new formats). Sega Saturn, a newer format that never caught on and was recently discontinued, was carried by 18.6%, while 16.9% still had the very old eight-bit Nintendo software. CD-ROM games for computers were carried by 18.6%.

But this situation is apparently changing, as 36.5% of respondents reported that they were expanding the number of games in their rental programs, which means more new-format games will be replacing the old software.