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Game Store Profitability

5 replies [Last post]
Mon, 06/30/2003 - 21:34
Anonymous

I live near Harrisburg, PA and I've seen several game stores come and go over the last decade. Because I've always loved games, I've sometimes thought about designing them (that's why I'm on this forum now) and I've sometimes thought about running a game store.

I've considered mortar-and-brick operations and web-run operations. My impression is that running a game store (real or virtual) is not a profitable venture and that most people get into it purely because they love games. BUT... Out of curiousity's sake I'm wondering what game stores stand to make in profits.

To simplify the answer, let's just stick to the profits on sales and not to facilities, utilities, and upkeep. What is the typical price that a retailer gets a game for and what is the markup? On that note, about how many games do retailers typically sell? I realize that the numbers may vary greatly from operation to operation, but lets just consider the extremes and the average. I guess FunAgain is the biggest games retailer in the USA (so we have a high-end extreme). At the other end of the spectrum we have a typical mom-n-pop shop (or start-up). Then there's a middle ground somewhere... so:

1. Best guess monthly games sold by a FunAgain?
2. Best guess monthly games sold by a typical game store?
3. Best guess monthly games sold by a start-up game store?
4. Typical markup on games (cost vs. retail)?

I'm not money hungry. I'm just wondering how easy it would be to make a living in something games related like a game store...

Mario

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Tue, 07/01/2003 - 14:34
#1
Anonymous
Game Store Profitability

I can't speak for the quantities that a given store may sell. It greatly depends on location and the local market, store marketing efforts etc.

As far as mark-ups go, you can generally expect to purchase your inventory at 40%-60% of suggested retail, depending on the size of your purchases.

Hope that's a little help.

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Thu, 07/03/2003 - 11:27
#2
phpbbadmin
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Joined: 04/23/2013
Game store

I've thought about opening a store, although I don't feel like trading in my current financial stability for what-if that comes along with that whole procedure. My ideas was instead of choosing to run brick and mortar versus an internet shop, why not run both? I can almost guarantee that running a brick and mortar store will NOT turn a profit (at least initially). However, if you had the Internet purchases to back up your brick & mortar store, then I think it might work. I think the key to the B&M store is to allow/encourage open playing at any time in your store, with any of the games. Also, you would want to hold late hours so people can play as long as you want. Most people wouldn't want to stay at their store after closing, but the good thing about game store employees is that they like to play games and you could encourage them to keep the store open for playing as long as they wanted to stay open. In order to do this properly, you might want to have one of those security gate thingys so you could section of the store portion of your store from your gaming area. The other thing to consider is to sell highly liquid items. By this I mean Yu Gi Oh, Pokemon and Magic. For simplicities sake you might steer away from selling singles and only sell sealed packs and such. Also another thing I thought of was whether or not to sell the games at different prices. Obviously internet stores sell games at greatly reduced prices and this is how they get a lot of their business. Would you want to sell the games in your Brick & Mortar store at the same prices as your internet store? If you did have different prices, you would probably need to have a seperate entity for your internet division so people wouldn't yell 'foul'.

Any other thoughts about this?

-Darke

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Thu, 07/03/2003 - 21:34
#3
FastLearner
Offline
Joined: 12/31/1969
Game Store Profitability

I attended the GAMA Trade Show a few months ago with a buddy who is looking into starting a game store.

We spoke with many distributors and the average discount was about 40%, with a standard deviation of only about 2% or so.

When there I picked up a copy of Comics & Games Retailer, an industry mag. It includes figures for average sales at stores.

For games here were some of the averages for the month of December 2002 (a good month in theory):

Role Playing Games

Average items sold (boxed set, rulebook, and sourcebook): 54 items
Gross revenue for the top 12 games: $1,300
(that's the bulk of the items)
To give you a sense: D&D 18.7 tiems, Vampire 5.5, GURPS 3.6, Sword & Sorcery (d20) 3.5, Rifts 3.0, everything else 2 or less.

Collectible Miniature/Disk Games

Starter Sets: 26
Boosters: 211.2
No dollar amounts associated

Trading Card Games

Boxes of cards (starters or boosters): 59.4
Gross revenue from the top 9 (most of them): $6,000

Miniatures Systems

Starter Sets: 3.7
Rulebooks/Supplements: 10.9
Miniatures under $15, packages: 154
Miniatures over $15, packages: 39.2

Strategy & War Games

Finally our category!

Games sold: 1.9

By product line: Axis & Allies 0.8, Risk 0.4, Settlers of Catan 0.3, Civilization 0.2, Carcassonne 0.2

Yikes!

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Fri, 07/04/2003 - 04:40
#4
zaiga
Offline
Joined: 12/31/1969
Game Store Profitability

Instead of saying 'yikes', you could also look at it with a positive view and conclude that there is still a lot of potential for growth in the U.S. adult strategy boardgame market.

:wink:

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Fri, 07/04/2003 - 13:07
#5
FastLearner
Offline
Joined: 12/31/1969
Game Store Profitability

True, true, and that's a good optimistic view.

The pessimist's view says that the same could be said of moss-covered three-handled family credenzas. :wink:

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