One of the few bright spots in the economy recently has been the video game industry, and in particular, video game retailers. One of those retailers -- Gamer Doc (www.gamerdoc.com) is based in Newport Beach, and we caught up with Jim Belanger, the firm's President, to dig deeper into why video game retailers seem to be doing slightly better than others. Unlike most of the firms we talk to, Gamer Doc operates as a franchise, and we also talked with Jim about that business.
Tell me why you think your industry isn't being hit as badly by the recession?Jim Belanger: I think that the main reason, is the price-value relationship of entertainment is changing in this economy. There's a younger generation of gamers, in particular, which is taking control of their entertainment experience. For example, if I'm going to take an hour and do something, I'm going to control that myself. Rather than spending $300 on a Laker game on a Tuesday or Wednesday, they are playing Halo 3 when the kids get home from school, or Wii bowling, or Guitar Hero. There's a number of families who are now gaming together, using entertainment together--just like you're seeing more people enjoying family meals together more. There's a big change in family dynamics going on, and I think that's what makes gaming so much fun. If a game costs $60, but gives you 100 hours of play, there's not a value out there like that, especially in entertainment.
It also seems online stores do not seem to be affecting you as much as other retailers?
Jim Belanger: Again, retail is changing as well. I think people have bought their 27 refrigerators and 15 cars, and I think people don't have to overbuy anymore. I think people are a lot more responsive and responsible in what they purchase, and think about it a lot more. When you look at the gaming industry, there's the hardcore gamers, who are the most intelligent group of customers you can have. Treating them with respect is a big, important part at Gamer Doc. We actually invite them in, to help with stores, because they have a great knowledge of the local market. The other part is the casual gamers, who tend to be very intimidated by what goes on in hardcore gaming. Those are two different positions going on, and we've created a store which is comfortable to both. For example, with the casual gamer, I was talking with a mom in our Delaware store, and she was telling me she could sit in our party room, and have a coffee and visit with two of her friends, while her son tried out games. The next week, they came back, we set up a Wii in the back, and they played Wii tennis for the first time. It's more about how we're going at retail.
My father was in the restaurant business when I was growing up, and he said you had to have good food. What it comes down to, is this generation of young people have decided--enough is enough, I don't need these designer things, I just need to take care of myself and my own livelihood, and control what goes on in our life. The television content on TV and quality is very poor, and marketers are trying to direct everything that is happening. The population is tired of that marketing. We as retailers no longer know how to bring people into stores. What we've design into our stores, is the old retail adage, that the customer comes first. We don't want do sell them what they don't need, and our training is around listening and answering questions, not talking and telling them what they need. That's the biggest difference on how we treat our customers.
For those who haven't walked into your store, can you talk about the experience?
Jim Belanger: Walking into our store, you get a tour guide in our stores. You walk in, and they will tell you about the store, and the nine different points that differentiate us from our competition. In that tour, they're listening and asking questions about your gaming knowledge, and steer them to the right part of the store, whether you're a hard core gamer or a gaming family. We have displays to see the upcoming and popular games, and also the most popular games online in the area. We also help Mom and Dad to understand things much better, and we can set them up on an Xbox Live account, and let them hear the chatter and what's going on--and so they realize they can be offensive, and that you have to be careful. We're a big help to parents. A big part of how our store looks like. It's not cluttered like other stores are. Gamers are very highly educated, knowledgeable, and appreciate being treated well. We also do birthday parties, group parties, because gamers are very social. Gamers can play heads-up on our servers. But, it really comes down to the service part. There's between 48 and 50 percent of people still on dial-up, and even though downloadable games are in the future, so far it's proven difficult. We've absorbed that into our store, and help people with downloadable games. That said, the industry will continue to change, and we will be flexible and interactive with what goes on in technology. That's the fun part of the gaming industry, there's always something new and exciting happening..
It sounds like a lot of your focus in on families--unlike some of your competition--although it sounds like you also work with the hard core gamers?Jim Belanger: Our competition is all about hard core gamers. However, at our stores, I can sit down in the store and they'll teach me the game. I'm 54, and it's pretty exciting to learn something new at my age. One good part of the hard core gamers, is they're astonishing people. They love to teach and help everyone. Everyone else kind of caters to the hard core, but we're totally different. They know what they want, and they can go to our stores and find what they need, go out, and play their game--but we'd also love to have them working for us.
Many of our readers might be familiar with franchises work, can you explain that?
Jim Belanger: I started with Bally Manufacturing, which bought a pizza chain, and I spent some time developing what was an adult version of Chuck-E-Cheese, and have been in gaming ever since then. I've been in franchising, and operations, and came along as the video game industry started. I went to work for a competitor, and had a wonderful education and a great time, and enjoyed working from them and seeing where the industry is going. But, I left, because in my own humble estimation, there is a beter way. The reason you go to franchising, is you can build stores faster. It takes longer with company owned stores. Usually, in your first year, you open a store with a concept, and then franchise. We did it differently, and we started franchising without any store openings, with people who believed in the dream of what we're talking about. With the franchising world it's very different to opening up your own business. We get on the phone once or twice a week, with other people going through the same phase, and we as a franchisor teach them how to open the stores, help them through the different parts of it, where they may not have the ability or knowledge. Those things might be building permits or other areas. At that stage, they start to teach us, about our business, and we become a conduit for the ideas that are right for our concept and our brand. We share that with everyone else and grow. Our great ideas come mostly from our franchisees.