Retailers ready for midnight rush to buy new video game systems

Posted Wednesday, Nov. 13, 2013  comments  Print Reprints
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Video gamers are getting ready for midnight madness.

On Friday, Sony will release PlayStation 4, the newest version of the popular gaming console, to be followed a week later by Microsoft’s Xbox One. As the first new systems from the industry leaders in seven or eight years, the PlayStation 4 and Xbox One are expected to be hot sellers for the holidays.

So both GameStop and Best Buy are hosting midnight openings each Friday, knowing that gamers don’t want to wait even a few hours to get their hands on the new controllers.

“Customer response has been huge,” said Jackie Smith, a spokeswoman for Grapevine-based GameStop. “Since Sony and Microsoft first announced the new consoles to now, we have had nearly 2 million people join our ‘First To Know’ lists to get news and information about the PS4 and the Xbox One.”

The phones are ringing over at Best Buy as well.

“Folks are fired up about it,” said Brian Reed, general manager at the Heritage Trace Parkway store in far north Fort Worth. Questions range from how customer lines will work on launch days to whether people can still pre-order. (No, they can’t.)

“You don’t get that with a run-of-the-mill launch,” he said. “Customers know they may need to be ready to go to a certain location at a certain time. They understand that this is going to be one or two of the super desirable items to put under the Christmas tree this year.”

Both retailers plan special events for the launches.

At GameStop, fans will be treated to contests, prizes and food trucks leading up to the midnight openings, Smith said.

Best Buy plans in-store demonstrations where customers can try out the new consoles. Its stores will close from 9:30 to 10 p.m. tonight and again on Nov. 21, then reopen, allowing as many customers as possible to mingle inside the stores from 10 p.m. to midnight as they await the launch. Customers will be separated into a pre-order line and an available-to-buy line with tickets that match up to the consoles available.

Retailers haven’t disclosed how many units they’ll have for customers who didn’t pre-order.

“Those numbers will be limited,” Reed said, “but it certainly won’t be like the old days where we have one or two units and everybody has a riot mentality.”

Additional consoles will continue to be delivered to retailers throughout the holiday season, he said.

Not kid stuff anymore

There’s good reason for the euphoria over PlayStation 4 and Xbox One.

Analysts predict that up to 5 million systems may be bought by the end of the year. In the U.S., more than half of households own a game console, and consumers spent nearly $20.8 billion on video games, hardware and accessories last year, according to the Entertainment Software Association.

The industry predicts that North American sales could grow by 20 to 30 percent over the next year, and by 10 to 15 percent in 2015.

Retailers, especially those that focus on video gaming, can expect a big boost in sales if they can attract consumers.

The new systems will have better graphics, plus more speed and power. Multimedia connectivity with cellphones and tablets has been added, and both feature a 500-gigabyte hard drive, significantly larger than the PS3 or Xbox 360. Social media engagement is a big push on each system. And both can record game play and post it to Facebook.

The PS4 is retailing for $399, while Xbox One costs $499.

Because the quality is expected to be a significant step up, interest extends far beyond the teenage gamer to adults of many ages, Reed said.

“Our employees work around this stuff all the time, and they can feel that this is something special,” he said.

Retailers duke it out

Retail analysts said some stores will benefit more than others, but even big-box retailers with a diversified product mix, such as Target, Best Buy and Wal-Mart, should get a boost.

“If the PlayStation and Xbox are well-received, they could be a traffic driver into those stores and result in parents picking up additional purchases as they hit a Best Buy or Wal-Mart,” said Ken Perkins, founder of Los Angeles-based Retail Metrics, a retail research firm for the institutional investment market.

“For GameStop, it is a much bigger issue. Their sales and profitability are very cyclical and tied to both hardware and software launches such as the release of the newest version of” Call of Duty.

GameStop declined to discuss the potential impact on sales, as the publicly traded company is in a quiet period before next week’s release of third-quarter results, a day before the Xbox One launch. But investors think good days are ahead. Its stock (ticker: GME) has more than doubled this year and closed Wednesday at a 52-week high of $57.59 a share.

“Given that this is GameStop’s bread and butter, strong PS4/Xbox sales could prove to be a boon for the company,” Perkins said.

These consoles could keep on giving — at least for retailers — perhaps far beyond the holiday season as new game titles hit the shelves and consumers who waited to buy take the leap.

“Every retailer who sells gaming should have a significant increase in sales year over year,” Reed said. “It has to go up, because we didn’t have anything new last year.”

Kerry Curry is a Dallas-area freelance writer. This report includes material from the Los Angeles Times.

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