British Gaming Accessories Company Gioteck Foresees ‘End of High Street Software Retailing’

Gioteck, the award-winning independent peripherals designer and manufacturer, has claimed that within five years high-street retailers will have effectively ceased trading in games software.

The company cites the poor margins on software, along with improving broadband speeds and the increasing number of gaming developers offering content directly as key factors.

Alan Jones, General Manager, Gioteck says: “Achieved margins for software have been eroded by price discounting in a challenging market, particularly when larger retailers are able to drive prices down on software in order to increase footfall and generate revenue from other products. Retailers are starting to recognise that with limited space available they’re better off selling products which give them a better return.”

“In the past, developers would use distributors and retailers to reach their target market, but they clearly favour a more direct sales model. Improving broadband speeds mean that consumers are able to download their favourite titles in minutes, at the click of a button, directly from a developer’s website or other online platform.”

The company also states that its core business, peripheral design and manufacturing, will benefit strongly as a result, the global accessories market backs-up Jones’s claims, being currently worth more than $6bn worldwide despite the economic downturn.

Jones continues: “Retailers understand that accessories are becoming an increasingly important part of the category mix. Research shows that accessories can actually drive platform sales and retailers are becoming more aware of this.”

“Within five years, we believe that retailers will be making the majority of their revenue from hardware and not software, which puts us in a very strong position. The space retailers reserve for accessories should be increased now, not later down the line. Soon there will cease to be a point to reserving shelving space for software titles which are far easier to access digitally.”

Gioteck has seen average revenue growth of 41 per cent over the last five years and has an increasingly global footprint. Recent deals in the UK, US, Germany, South Africa and Greece now ensure that the Gioteck brand can be found in established retail giants such as Walmart, MSH, Auchan, Asda, Game UK Ltd and Gamestop.

Jones adds: “The future will focus on exciting new hardware formats playing and streaming digital content directly. The role of an accessories company will be to make the interface of hardware and software more engaging, exciting and emotional for the consumer wherever they choose to play it and however they choose to receive the content. With this happening we will see accessories driving the hardware business and vice-versa, with technological advances paving the way for new development and increased consumer spend.”