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How stores selling video games fight for space in an ever-more digital world
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Josh Hornor, co-owner of Wizards Video Games, talks with a customer in July at the Gainesville store. - photo by Kenneth Hucks

Josh Hornor likes knowing who the people who come into Wizards Video Games are. With competitors like GameStop, Wal-Mart and Best Buy all within throwing distance of the Gainesville independent store, Hornor wants the store he owns to be the informed, personable and community-ingrained alternative to big chain stores when it comes to buying and bonding over video games.

This goes beyond knowing the names and faces of people who walk through the store’s mural-covered entrance into its memorabilia-covered walls -- it’s about knowing what they like, what might interest them and maintaining a relationship that goes beyond the transaction of a video game, comic book or figurine.

A dedicated video game store owned and run by people as passionate and knowledgeable about the games they sell as the people who come in to buy them draws in people looking for an experience. But stores like Wizards are fighting to exist in an industry that’s implementing digital-driven policies and platforms.

Stores like Wizards and Buford’s Video Game Trader have seen the effects digital distribution is having on declining physical game sales, and that means stores have to find ways to survive in a digitally driven future by expanding into adjacent markets of comics, toys and other merchandise, all while trying to maintain the games-centric business and community both have accumulated in the past decade.

GameStop, the biggest chain in the business, is suffering its biggest annual loss in company history and closing down online affiliate stores. Meanwhile, game companies are pushing toward digital storefronts on services like Xbox Live and PlayStation Network hoping buyers will download games through online platforms instead of buying physical games at stores like GameStop, Wal-Mart or Best Buy. Google is developing a new streaming service called Google Stadia, which will allow people to stream video games on Google devices; Microsoft has released a new Xbox One S console that doesn’t have a disc drive to use physical games and online stores like Steam and the Epic Games Store have already rendered physical PC game sales mostly obsolete. 

As these corporations look for ways to maximize their profits by cutting out the middle men, the walls are closing on physical video game sales, and for stores like Wizards and Video Game Trader, that means adapting to the shifting market or die trying. 

According to Hornor, the fear that the suppliers of the store’s product have been trying to push them out has been a persistent black cloud over the store since it opened 11 years ago as a chain store called Play N Trade.

“We started as just a games store, and when we were first thinking about doing this we knew where it was headed,” Hornor said. “We’re all gamers, we’d already bought digital stuff. So we planned on the basic business model of just doing used games and new games and that was maybe going to last five or 10 years.”

While “video games” may still be part of the store’s name, Hornor estimates games themselves account for two-thirds of its merchandise. Getting to this point has been a gradual process, as the other third of items on sale at Wizards ranges from toys to comics, all in the name of expanding the store’s catalog for the inevitable digital future of video games retail.

“It was kind of a natural progression,” Hornor said. “It’s not even something we planned way in advance, we just started taking comics because we talked about it. The toy thing, we’d kind of messed with it a little bit, then we ended up working a deal out with Billy from Billy’s Toys when he went out of business and we ended up with a ton of toys. It just all kind of happened organically. I’d like to say we planned it all out 10 years in advance but we did not.”

For Video Game Trader owner Tom Sansone, who officially opened a brick-and-mortar shop in 2010 after 11 years as an online store, outmaneuvering the shift to digital has been easier, as the store primarily focuses on retro games instead of keeping up with modern games and systems. There are still modern products for sale at the store, as well as merchandise like vinyl records and board games, but much of Video Game Trader’s stock is made up of product that dates back between 20 to 30 years, like Nintendo Entertainment System games and Super Nintendo Entertainment System games — systems that launched in 1983 and 1990. This focus on older collector items and games has given products a longer shelf life, circumventing the shift to digital almost entirely, for now.

“I don’t worry about the new consoles, I worry about the old stuff,” Sansone said. “Even if the next set of consoles were completely online only, no physical format at all, I’d still have another 25 or 30 years of the business before we’d go away.”

Honing in on older games has revealed some unexpected things about the retro market, according to Sansone, which he says has given him hope that, as long as things like gaming YouTube channels maintain public interest in older games, he should have a market for older products.

“When I first opened this store I wouldn’t have foreseen that 12-year-olds are going to want to play NES games,” Sansone said. “I thought it would be the people that played them a long time ago that would want to play them again. With YouTubers and all these people playing retro games and doing historical videos on them, a lot of the customers that are buying older stuff are younger people that weren’t even alive when it came out,”

Wizards has managed to outlast the timeline Hornor originally projected, but the signs that companies like Microsoft were trying to push stores like it out of the equation have sprouted up several times over the years. When the Xbox One was originally revealed in 2013, Microsoft planned to only allow physical game discs to grant one license per device, which would prevent people from borrowing each other’s copies, as well as cut the used games market, a pillar of video game stores’ business model, off at the knees. This was quickly altered after overwhelming negative reaction from the public, which both Hornor and Sansone expected, but it didn’t stop apprehension about where the industry was headed.

“It was scary,” Hornor said. “Any time any kind of announcement like that happens it’s like ‘OK, if it’s what the hype says it is that could be a problem.’ So far most of those things haven’t really been a huge issue, but back then I was like, ‘Oh man, this is going to suck. If they actually pull this over on everybody we’re going to be going digital much faster than I was thinking.’ So fortunately it didn’t work out that way.”

Microsoft’s initial plan to cut down physical sales may have failed, but it hasn’t kept the push toward digital sales from affecting Wizards and Video Game Trader’s business in smaller, but noticeable ways. Gift cards, which are usable on online stores on services like PlayStation Network, Xbox Live and the Nintendo eShop, are for sale at most stores that sell video games, but two years ago Wizards opted to stop selling them after an uptick of interest meant the store was losing money in selling them.

“We noticed — I want to say it was about two years ago —  it just started getting really crazy with people just trading in games, and all they wanted was digital money to buy digital games,” Hornor said. “We did that for awhile and I realized basically what we were doing, the way it worked out money-wise, was we were essentially giving people cash for games we wouldn’t normally give cash for. We’d not make money at all, not even breaking even on the cards. So it was this losing, downhill battle, so we decided to stop carrying cards altogether for multiple reasons.”

These gift cards are still for sale at Video Game Trader, but Sansone said he’s skeptical about whether customers are getting the value they should be getting by going digital in the first place when buying used physical games is cheaper than buying it for full-price online, which has no resale options or value.

“People are buying more digital now and not buying used,” Sansone said. “Which I don’t think is very smart for a consumer, because you’re paying the same price digitally. You’re paying $60 for the game when you could probably go get the game used, even if you’re only saving $5, saving $5 is saving $5.”

In addition to competing with online stores, Google launched the Stadia streaming service this November, which not only gives people an alternate means of playing and purchasing games, but doesn’t require a dedicated console at all. Instead games are accessible through Google Chrome browsers on computers, phones and tablets. While the notion of games you can stream is another looming threat to video game stores, both Sansone and Hornor don’t believe the technology is at the point where it can replace game sales, physical or digital. Especially not on a local level, where internet speeds can’t match the quality of playing games on a disc or downloaded onto a device.

“There’s too many people who don’t have good internet connections,” Sansone said. “Sometimes they’ll have trouble buffering Netflix, and if you can’t stream a movie you can’t stream a game. How do you stream that quality? Now 8K TVs are coming out so maybe the next generation games are going to have 8K support. How do you stream that? You can’t.”

Local internet speeds have been a detractor for people looking to make the leap to digital, which has helped slow the shift in Hornor’s eyes. 

On PlayStation 4 and Xbox One, games can reach download sizes of up to 100GB. Red Dead Redemption 2 even went over this, adding up to 107GB of storage on Xbox One. The size of video game downloads, coupled with the amount of locals with poor or no internet connections, led to Wizards letting customers use its wi-fi to download large system and game updates for free. Hornor said he believes the lack of reliable internet speeds in the area will keep streaming services like Stadia from becoming the new normal, but as technology evolves and more digitally minded generations start spending their own money, Stadia will become a more significant market competitor.

“My thinking is the concept of the Stadia will not appeal to anyone that’s an adult that spends their own money right now,” Hornor said. “But if they can get all the kids on board with Fortnite-y type, viral, all-encompassing type things, and get them onto the idea, by the time they’re old enough to spend their own money, not only will the technology be better, the bandwidth and all the infrastructure that will be necessary to run something like that properly will be better.”

Changes and shifts in the industry may bring into question the practical need for stores like Wizards. But for regular customers like Austin Clements, the experience of shopping at a place with people he knows are knowledgeable and trustworthy drives his repeated visits to the store, especially when it comes to finding a place that is flexible enough to meet his needs in ways chain stores can’t.

“If I ever have an issue with a game system, disc or accessories, Wizards always lets me bring in the item for troubleshooting,” Clements said. “With a chain store, it’s immediately out of the location’s hands and I have to call a number and get the runaround.”

Clements has gone to Wizards regularly over the past three years, and said the store’s passion and personable atmosphere is something he’s never seen replicated at corporate stores like the electronics section at Wal-Mart.

“I think being a smaller store allows Wizards to create a personal experience for the consumer,” Clements said. “On weekends when I may only have two or three comics to buy, the visit can be short and sweet, but I find myself sticking around to look through previews of the upcoming month’s catalogue to geek out out about whatever’s going on in geek culture.”   

While streaming, digital distribution and the lingering threat of removing used games from the equation are all dangers to dedicated video game stores, for Video Game Trader, its business model is the healthiest it’s ever been. As long as the focus of the store is older games, Sansone said he hopes it will stay that way, but isn’t ruling out a future where other merchandise one day equals the store’s video game catalog.

“The market will change, I’m sure,” Sansone said. “When we first moved down here in 2012, the market was OK, but in like 2015 the retro market exploded for us. In a couple years we’ve doubled our sales and got real popular. So if that trend stays, I’ll be good, but who knows how long it’s going to last.”

Likewise, Hornor said he’s content with where Wizards is, and that as the market changes the store will change, too, even saying that the branding of a video game store doesn’t fit where the business is going.

“Probably the next set of shirts I have made we’re going to take the ‘Video Games’ off and just be Wizards,” Hornor said. “At this point, yes, obviously we sell video games and it’s at least a full two-thirds, if not a little bit more of our overall business model. But we do so much more I don’t want us to be pigeon-holed as a video games place. That’s why I like on the marquee sign up front it says ‘games, toys and comics.’ So we just want to keep that up and anything that I feel like is in our wheelhouse that we could have fun selling and taking on trades, we’ll do it.”




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