LAST CHANCE:

Nine passes left to attend the Digiday Publishing Summit

SECURE YOUR SEAT

Game Digital is looking to esports to turn around retail sales

Game Digital to move into sports.

Gamers don’t want to buy games in stores, but they will pay to play games in them, according to retailer Game Digital.

That’s the thinking at the heart of Game Digital’s latest attempt to kick-start its business, which has been hit hard by online competitors and came close to bankruptcy in 2012. The retailer expects sales for the 53 weeks that ended on July 29 to decline 5 percent from £822 million ($1.1 billion) to £780 million ($999 million). But esports is representing a small yet fast-growing part of the business.

Last year, it launched Belong, a section in 18 of its Game Digital stores across the U.K. where gamers can pay to play together, participate in fan events and test new products like virtual reality. Game Digital plans to open up to 20 more such stores by year’s end after seeing how much money it generated in the first half of the year.

Sales from stores with Belong hubs in them jumped 120 percent year over year in the 26 weeks that ended on July 29 to £8.6 million ($11 million), although from a small base. Gamers at those stores are expected to spend on average £384 ($491) in 2017, versus the £191 ($245) that a customer at a regular Game Digital store would spend in the same period, according to the company. Furthermore, 21 percent of the people that visited the stores in the first half of the year were new Game Digital customers.

Having live gaming in stores is a way for Game Digital to sell more merchandise. Gamers who end up paying to play games have an average playing time of over 1.25 hours, the business said.

Game Digital sees its future beyond just selling games, the demand of which is declining. For the 12 weeks that ended on March 12, physical game sales grew 0.5 percent in the U.K., the first upturn since last October, according to Kantar Worldpanel.

To get more gamers into stores, Game Digital wants to build a community around each one. It’s developing a site to show gamers what events its stores host. It’s also creating an in-house content production and broadcast studio to make and distribute content from the stores.

Beyond its stores, events like Insomnia have become important to the bottom line. Ticket sales for the gatherings, which are held in Scotland and Birmingham, England, this year, jumped 49 percent in the first half of 2016. Game Digital plans to bring in over £9 million ($11.5 million) for the full year.

Competitive gaming has gone from split-screen matches to the big money pro tournaments of esports in recent years; gaming expert Newzoo estimates it’ll be worth £1.2 billion ($1.5 billion) by 2020. Game Digital is aiming for the grassroots end of the sport, rather than competing directly with the big professional esports events such as the Electronic Sports World Cup or launching its own branded teams. It sponsors teams that compete at tournaments, but rather than paying them fees, they’re offered merchandise and the chance to compete against some of the world’s best gamers.

More in Media

Substack creators attribute their boost in subscribers to the platform’s community tools

Substack’s ongoing efforts to win over creators by becoming a community platform are winning over writers who value being part of a vibrant creative community.

Media Briefing: Here are the hurdles to Perplexity’s pitch as the publisher-friendly LLM

Publishers are cautiously optimistic about Perplexity’s new revenue share model, but remain concerned about issues of adoption, payment terms and transparency.

How Gabriella Gomez built a six-figure career on TikTok Live without signing sponsorship deals

Top U.S. TikTok Live star Gabriella Gomez has made livestreaming on TikTok into a lucrative career — without relying on brand partnerships.