Design your own video game store:

[neogamer]

Okay, some of you who have read my Play N Trade thread already know that I am thinking about opening up a video game store or franchise. I am now going to ask that you (the gamers and collectors) give me input into designing the perfect store! Keep in mind that if I buy the Play N Trade franchise, I am bound by their franchise agreement and cannot change the core business model that much. However, if I design a store from scratch (meaning I go out on my own with no support from a larger corporation i.e. the franchisor), I could do whatever I want. The failure rate of "mom and pop" video game stores is extremely high, so that is why I am considering the franchise.

Please feel free to post whatever you want. I have a budget of $125,000 to $250,000. That also includes operating capital as well. I only ask that you use a little common sense, and be courteous. I will only correct you if you post something outlandish and completely incorrect. I happen to have a lot of education in business, others do not, you may still feel free to post in this thread, provided you post positive thoughts and ideas.

All input is appreciated and I will thank you up front for posting! Let us begin!
I expect lots of great ideas as you hopefully love the world of video games as much as I do!

[Wolfrider31]

Assuming that you are starting a mom and pop shop, I'd split my focus 50/50 on classic/import gaming and the modern stuff. The only reason I'm suggesting having a large segment of your store be classic/import is that, judging from my own buying habits and those of my friends, I have a tendency to either shop online for newer stuff or pop into the larger chains. Just because their prices tend to be cheaper and they're more likely to have a larger stock.

Mom and pop chains usually draw my attention when they offer used, hard to find stuff.

[Trebuken]

I've always tries to identify why the mom and pop stores fail.

1.) Many seem to have issues getting new games at a decent price and then selling through them before they lose their value. You have to attract customers to your store to buy these new releases.
2.) They virtually never advertise...
3.) They under price many of their games (espeacially rare ones) to beat Gamestop...
4.) They offer too much in trade sometimes.
5.) They do not maintain enough inventory...

I think #5 is the only obstacle, espeacially on older games - they don't seem to get traded in like they used to.

We have one store near me that seems to have a 'source' for all their games and DVD's. They have a ton of inventory, new espeacially, and it defies the odds. You might gain this advantage by franchising (what do I know), but you should establish waht it will cost to sell new releases immediately.

Expect to work 100hrs a week and do not hire anyone until your making money...

[DeputyMoniker]

I don't have any experience in this type of business and I've just begun my business education. (Pre-Law/Business Admin) I'll share my thoughts based on what I wish I had in my area. If you can make them work & turn a profit, then maybe I'll swing by your shop one day & participate in the fun.

I'd love to have a gaming club in my area. Spanning from classic systems to new ones. Something like this may be good for residual income. A customer comes in & purchases a game, then you sell them a spot in the club for a monthly fee. (just a thought) The club meets once a month (or every 2 weeks...whatever) and get down on some hardcore gaming. You could have a 2600 night, Saturn night, NES night, etc. The evening starts organized but becomes a little more relaxed after the competition is over. You start with a roundtable discussion about the system you'll be focusing on for the night. People share some stories, discuss some topics, and have a few Mountain Dews. Take a 15 minute break while everybody gets prepared for the gaming. From there, it's just gaming for 2 or 3 hours. You send a newsletter regarding what's planned for the next meeting, that will keep it in peoples minds. Include a couple coupons in it to encourage non club member customers to sign up for the newsletter. Before a new game comes out, start promoting the meeting that will take place about 2 weeks after the release of the game. That gives people time to buy it and practice. Club members get a small discount if they purchase the game from you. Maybe you could skip the whole monthly fee and just do a month to month thing. By that I mean, "buy Halo 3 here and join us for a release party." The game price includes pizza & drinks. Unfortunately, there is usually a very very small margin of profit in new games so that may not work. I don't know, you're the business expert. :P
That's what i wish I had in my area. How many other people would take the time to participate in something like that? I don't have a clue. I just know I would.

I wish you good fortune!!

[kaedesdisciple]

I don't have any experience in this type of business and I've just begun my business education. (Pre-Law/Business Admin) I'll share my thoughts based on what I wish I had in my area. If you can make them work & turn a profit, then maybe I'll swing by your shop one day & participate in the fun.

I'd love to have a gaming club in my area. Spanning from classic systems to new ones. Something like this may be good for residual income. A customer comes in & purchases a game, then you sell them a spot in the club for a monthly fee. (just a thought) The club meets once a month (or every 2 weeks...whatever) and get down on some hardcore gaming. You could have a 2600 night, Saturn night, NES night, etc. The evening starts organized but becomes a little more relaxed after the competition is over. You start with a roundtable discussion about the system you'll be focusing on for the night. People share some stories, discuss some topics, and have a few Mountain Dews. Take a 15 minute break while everybody gets prepared for the gaming. From there, it's just gaming for 2 or 3 hours. You send a newsletter regarding what's planned for the next meeting, that will keep it in peoples minds. Include a couple coupons in it to encourage non club member customers to sign up for the newsletter. Before a new game comes out, start promoting the meeting that will take place about 2 weeks after the release of the game. That gives people time to buy it and practice. Club members get a small discount if they purchase the game from you. Maybe you could skip the whole monthly fee and just do a month to month thing. By that I mean, "buy Halo 3 here and join us for a release party." The game price includes pizza & drinks. Unfortunately, there is usually a very very small margin of profit in new games so that may not work. I don't know, you're the business expert. :P
That's what i wish I had in my area. How many other people would take the time to participate in something like that? I don't have a clue. I just know I would.

I wish you good fortune!!

I think that would be fun as hell. Instead of giving the games to the players and ushering them out of the store so they can go home and play them, why not let them hang out for a while? I for one would be willing to pay a bit more to have a better atmosphere, a better sense of community and the opportunity to play against flesh and blood people more often. I know it's being done already (DP we look proudly in your direction, for example) but there really needs to be more places like that. Encourage the kids to get together, play and socialize rather than just let them sit in their basements and rot.


Good luck on your venture, I always like to see more mom & popish stores dot the map.

[FantasiaWHT]

I've always tries to identify why the mom and pop stores fail.

1.) Many seem to have issues getting new games at a decent price and then selling through them before they lose their value. You have to attract customers to your store to buy these new releases.
2.) They virtually never advertise...
3.) They under price many of their games (espeacially rare ones) to beat Gamestop...
4.) They offer too much in trade sometimes.
5.) They do not maintain enough inventory...

I can agree with a lot of that. I think #1 is the biggest concern, though. Basically assume that you will not make any money selling new games, but that you will have to sell them just to get people in the door. Getting stuck with inventory is a killer, because I don't think independent stores can get the same sort of return-at-a-discount deal that the big retailers do with publishers.

One thing I have noticed with indie stores is the more you turn it into a place to hang out, the better you will do. Have games to play for free, have tournaments, nice comfy, soft chairs. If your area doesn't have one, offer a table or two for TCG players. Have a soda machine and snacks for sale. Most of my friends don't play video games, so, even at my age, I would really enjoy a place where I could always find somebody to play a game MP with.

Good luck and keep us up to date with what's going on!

[neogamer]

I think that would be fun as hell. Instead of giving the games to the players and ushering them out of the store so they can go home and play them, why not let them hang out for a while? I for one would be willing to pay a bit more to have a better atmosphere, a better sense of community and the opportunity to play against flesh and blood people more often. I know it's being done already (DP we look proudly in your direction, for example) but there really needs to be more places like that. Encourage the kids to get together, play and socialize rather than just let them sit in their basements and rot.


Good luck on your venture, I always like to see more mom & popish stores dot the map.

These are all great ideas! Thanks again guys.

BTW: This is something I am considering doing within the next 9-18 months. As you can see from my location I am in pennsylvania. There are a lot of game stores in my direct area, so the store would probably be located near the Allentown area. There seems to be less game stores in that area (if you know the area-you know what I mean).

[cyberfluxor]

You may want to look into hosting a gathering around there and seeing how large your local gaming scene is. Of course not everyone will show up but it can give you a feel for your community.

I believe the best starter is to buy bulk eBay auctions that'll give you games for under a dollar to just a few each so they can be resold for at least a small profit. It'll help fill your shelves and give a decent selection to start off.

Not sure about PA but around here what I do see flip the quickly are Sony, Microsoft and Nintendo goods. Slower moving companies are Atari, Sega, 3DO and PC/MAC.The thing about Sega and Atari though is if a collector of a system walks in they'll buy most of the stock at once, same with Nintendo on occassion.

Buy 2 get 1 equal/lesser value free works well with 8 and 16-bit games. Don't know how much that matters but that's what most people around here offer at their stores and it's not bad. Be sure you set a high enough profit to overcome the expense of free games though.

For trade-ins offer a bit more back as in-store credit. i.e. buy games for 60% your selling price and if they take in-store credit then they get 70%. This also helps you because sometimes younger kids will want to accrual their assets in your hands for a later day.

Absolutely offer tournaments! I can't express it much more but it'll create a gamer base around your store and will attract new customers interested in your events. Also having extra TVs setup for people to play newly purchased games or even test something out is a good idea. Funcoland comes to mind, you know they had one of the most awesome setups for a gamestore I've ever seen.

[neogamer]

Any more ideas guys?

Now is your chance. So far this has been very helpful. I never thought about having tournaments believe it or not, so that was a great idea.

The "cumfy chair" idea was also a great idea, as is the snack bar and soda machines.

I appreciate the info!

I am "trapped" in the corporate world (i.e. MBA's, bottom lines, etc.), so I don't get to see what the end customer wants. That is why I started this forum. Stores just don't listen to the end consumer any more, believe me I know. It is a growing problem in corporate America as well. As an educated analyst, I can tell you that if Game Stop and EB Games is allowed to "monopolize" the video game retail industry as whole we are all in trouble.

Unless of course, you don't mind shopping at Wal*Mart, Target, etc., but then you sacrifice selection for price. I want to avoid that!

[Anthony1]

I was working on a video game superstore concept for about 6 months. Basically, doing investigative work, trying to determine a good ballpark on the kind of investment capital needed. Ultimately, I determined that I would need about 1.5 million to launch the first gamecenter, along with capital to keep it running for 8 to 12 months. I was working on the business plan to present to potential investors, but then got sidetracked due to personal health problems and family issues. Also, one of the big problems I ran into, was the local parking regulations. Anywho, here is a bit of my Executive Summary written back in 2004, I'm willing to sell the rest of the particulars, or possibly join as a parter if you could help find the funding:

"The idea for "Blank Blank" - Video Game SuperCenter - was created as a natural response to the explosion in popularity of video games in the mainstream culture. The video game industry is a 15 billion dollar industry that continues to expand and grow. One of the leading areas of this industry is online and multiplayer games. Video gamers can now use their consoles to play games online, against tons of virtual opponents. These same games, typically also offer a "offline" multiplayer experience. Unfortunately, for the vast majority of video game players, the prospect of having multiple TV's and multiple game systems, and multiple copies of the same game is a very daunting proposition. Thus, most gamers are unable to enjoy offline multiplayer gaming. Sometimes gamers will get their friends to bring over their systems and a extra TV and the necessary cables to have a "Lan Party". They connect their systems together, and then each player has his own screen, and they are all inside the same game at the same time. Unfortunately, it is a very difficult process to get all the TV's into one room and hook all the systems together, and get everything working properly. This is where "Blank Blank" - Video Game SuperCenter comes into play.

Our plan is to open up a Video Game SuperCenter, that will allow these gamers to come to our center, and play the latest and greatest multiplayer games, against other players, all on state of the art equipment, in a fun and exciting environment. We will provide the screens, the systems, the games, the controllers, everything but the actual player. The gamer will be able to walk into our Supercenter and be totally amazed at what is going on in front of them. They will see our GameStations, most of which will accomodate 16 people for simulataneous play. The will see the latest and greatest video games being played on High Definition screens, with incredible Dolby Digital 5.1 sound coming from various speakers."



Anyways, all that was written in 2004, and is somewhat outdated. But the general idea was that we were going to create a gamecenter that would basically be the equivalent of Chuck E Cheese for 17 year olds. You know, Chuck E Cheese is designed for 4 to 9 year olds. Our GameCenter was going to be designed with 15 to 26 year olds in mind. We were going to compete head to head with similar attractions. Basically, we would be in the entertainment business, going up against Minature Golf, Movie Theaters, etc, etc. Just another form of entertainment. In addition to the gamecenter would be a cafe and a retail store, also there would even be a "RetroZone" and Little Gamer's Zone, for children. I've got tons of stuff written up, in terms of exactly how much money will be generated on a given day of the week, how many customers would be in the gamecenter at a given time, how many employees would be needed, the whole works. But like I said, everything got way-layed, and I had to put everything to the side, and then I never resumed it.

Anywho, if you're interested in more information you can PM me.

[DeputyMoniker]

I'll tell you what the customer wants. good customer service and a little respect while shopping in a game store. If I'm asking about a Saturn game and you don't like the Saturn, you need to keep your damn mouth shut. Don't hire any of those fake experts, they ruin the experience and it makes it very difficult for me to connect with a store & allow myself to become a loyal customer.
The best thing you can do for that place is make customer service the top priority. That'll set you apart form the vast majority of your competition. Try watching a couple of those training videos retail stores make their new hires watch. They tend to focus on how to provide good customer service.
Try hiring well rounded gamers. Make sure they aren't overly judgemental like I can be. I don't mean those well rounded Wii gamers. You know the type. They love to regergatate phrases they read in last months EGM. "I like the idea of experimenting with new ways of interacting with my games." "I'm intersted to see what the PS3 plans to do with the BluRay format." "I liked that FFXII explored a politically driven story. It's also more mature..."
"The sky is blue." "The sun came up today." "I like breathing air."
We all know that...you don't need to tell it to me like I didn't read the same article.
Anyway, those are my game shop pet peeves...try to avoid them because I think most people feel the same way when they walk out of a game shop.

[Trebuken]

Any more ideas guys?

Now is your chance. So far this has been very helpful. I never thought about having tournaments believe it or not, so that was a great idea.

The "cumfy chair" idea was also a great idea, as is the snack bar and soda machines.

I appreciate the info!

I am "trapped" in the corporate world (i.e. MBA's, bottom lines, etc.), so I don't get to see what the end customer wants. That is why I started this forum. Stores just don't listen to the end consumer any more, believe me I know. It is a growing problem in corporate America as well. As an educated analyst, I can tell you that if Game Stop and EB Games is allowed to "monopolize" the video game retail industry as whole we are all in trouble.

Unless of course, you don't mind shopping at Wal*Mart, Target, etc., but then you sacrifice selection for price. I want to avoid that!

We have a stpre with this setup. It ended up becoming a hang-out for the kids and scared the adult customers away. They kids also eventually did not buy much but just came in for free gaming.

Tournaments might be cool, but you should charge an entrance fee to keep some of the leeches away. I would not add any comfy chairs.

That store is going under at the moment.

[DeputyMoniker]

We have a stpre with this setup. It ended up becoming a hang-out for the kids and scared the adult customers away. They kids also eventually did not buy much but just came in for free gaming.

Tournaments might be cool, but you should charge an entrance fee to keep some of the leeches away. I would not add any comfy chairs.

That store is going under at the moment.

I'll second that. I watched a game shop go under in less than 3 months. The last thing you want is a teenager hangout. Let them hang out during the tournaments...other than that, no loitering.

[Fuzzball24]

Defiantly have to agree on the loitering part. Also, good customer service is a must! Also, make sure you focus heavily on even the Atari or odd stuff. There is a indie gaming shop in my town, but they don't even carry Pre-NES stuff.

[otaku]

definetly go mom/pop shop and focus primarily on used/retro gaming. Some of my favorite shops are complete shitholes but with awesome games and people in them. One is literally a run down 30+ year old mobile home in a bad part of town. Still kicks ass.

Anyway I like my stores cozy not huge and sprawling. Some kiosks/tvs with systems for testing/playing is a must. and cool memoribilia/collectibles scattered around for decoration always helps

Trying to get the store I work for (we sell only new games) to get new cases with holes for customers to reach through so they can browse the games more easily-great idea imo.

[neogamer]

I was working on a video game superstore concept for about 6 months. Basically, doing investigative work, trying to determine a good ballpark on the kind of investment capital needed. Ultimately, I determined that I would need about 1.5 million to launch the first gamecenter, along with capital to keep it running for 8 to 12 months. I was working on the business plan to present to potential investors, but then got sidetracked due to personal health problems and family issues. Also, one of the big problems I ran into, was the local parking regulations. Anywho, here is a bit of my Executive Summary written back in 2004, I'm willing to sell the rest of the particulars, or possibly join as a parter if you could help find the funding:

"The idea for "Blank Blank" - Video Game SuperCenter - was created as a natural response to the explosion in popularity of video games in the mainstream culture. The video game industry is a 15 billion dollar industry that continues to expand and grow. One of the leading areas of this industry is online and multiplayer games. Video gamers can now use their consoles to play games online, against tons of virtual opponents. These same games, typically also offer a "offline" multiplayer experience. Unfortunately, for the vast majority of video game players, the prospect of having multiple TV's and multiple game systems, and multiple copies of the same game is a very daunting proposition. Thus, most gamers are unable to enjoy offline multiplayer gaming. Sometimes gamers will get their friends to bring over their systems and a extra TV and the necessary cables to have a "Lan Party". They connect their systems together, and then each player has his own screen, and they are all inside the same game at the same time. Unfortunately, it is a very difficult process to get all the TV's into one room and hook all the systems together, and get everything working properly. This is where "Blank Blank" - Video Game SuperCenter comes into play.

Our plan is to open up a Video Game SuperCenter, that will allow these gamers to come to our center, and play the latest and greatest multiplayer games, against other players, all on state of the art equipment, in a fun and exciting environment. We will provide the screens, the systems, the games, the controllers, everything but the actual player. The gamer will be able to walk into our Supercenter and be totally amazed at what is going on in front of them. They will see our GameStations, most of which will accomodate 16 people for simulataneous play. The will see the latest and greatest video games being played on High Definition screens, with incredible Dolby Digital 5.1 sound coming from various speakers."



Anyways, all that was written in 2004, and is somewhat outdated. But the general idea was that we were going to create a gamecenter that would basically be the equivalent of Chuck E Cheese for 17 year olds. You know, Chuck E Cheese is designed for 4 to 9 year olds. Our GameCenter was going to be designed with 15 to 26 year olds in mind. We were going to compete head to head with similar attractions. Basically, we would be in the entertainment business, going up against Minature Golf, Movie Theaters, etc, etc. Just another form of entertainment. In addition to the gamecenter would be a cafe and a retail store, also there would even be a "RetroZone" and Little Gamer's Zone, for children. I've got tons of stuff written up, in terms of exactly how much money will be generated on a given day of the week, how many customers would be in the gamecenter at a given time, how many employees would be needed, the whole works. But like I said, everything got way-layed, and I had to put everything to the side, and then I never resumed it.

Anywho, if you're interested in more information you can PM me.

Just interested in a video game store specializing in all types of home based video games. You are talking about more of an "samusement center." I am not (at this time) interested in anything like that. If things change I will contact you!

As for the "cumfy chair" idea, I'm talking one or two not a hang out for kids. In fact kids without parents will NOT be allowed in the store PERIOD!

Second, yes, I will be charging an admissions fee for tournaments. Sorry to say, but nothing is totally free, except good customer service, which leads to good sales!

[MachineGex]

We have a stpre with this setup. It ended up becoming a hang-out for the kids and scared the adult customers away. They kids also eventually did not buy much but just came in for free gaming.

Tournaments might be cool, but you should charge an entrance fee to keep some of the leeches away. I would not add any comfy chairs.

That store is going under at the moment.

^ Words of wisdom. Plus, the noise level will drive you nutz in 2 months.

Here are my two areas that I feel most people make huge mistakes at:

1. Location: location is gonna be the biggest factor in how well you do in the short term and long term. A bad building(or landlord, location, accessability & visability, etc.) will be the first and last nail in your coffin. If you get a building too small, you will have an easy time making your rent, but you may have limited your top-end earnings. You should look at every building in town twice, before you sign a lease. Oh, the lease is another area you should put a lot of effort in making sure it meets all of your needs. Example: some landlords may have limits on signs(a-frames, window signs, building signs, etc.), you want to make sure you can use all of these(signs) for advertising. It is by far the best advertising you have and it is free(besides the cost of the sign). A good(profesionally made) a-frame sign can bring in 1/3 more business just by bringing in people who are passing by and see your sign.

2. Inventory & Pricing: really two different beasts, but both will be a huge factor in if you succeed. Make sure you make these two areas the focus of your stores strategy. Try and beat the competitors on pricing and on used game inventory. These are two areas that are usually very easy to be the best at, considering Gamestop(& the rest of them) do a shitty job. If you carry older games, you pretty much have a monopoly because most places don't carry them. Customers are looking for a real game store that carries all the systems & games for them. Try and focus on the customers needs, "Inventory & Pricing" are two good areas to focus on.

Good luck and make sure you do all your research before you start.

[eggwolio]

I've been trying to open a gamestore of my own for a long time, but have found no one to help back me, and my own financial history would be a large roadblock.

I think that something that no one is touching is something that can be offered to communities with little cost to your store and can go a long way. The education aspect of games.

Host a night each month where parents can come in and see a demo of what game ratings mean. Give a couple hours of your time, for these people to come in and ACTUALLY see what that little "M" means. Most parents have seen R-Rated movies and know what that means, but many only know what they're told about game ratings.

Also, there's a largely untapped market as far as the Wii goes, with seniors. Set up senior bowling leagues during weekdays, when you're not busy. Maybe cross-promote it with your local bowling center. Seniors are always looking for something to do, and if they're all on the same learning curve, they'll be completely open to the idea. This also paves the way for family tournaments, mother-daughter/father-son/grandparent-grandkid, etc. Lots of opportunity.

There's also the possibility of setting up Wii sports leagues in the wintertime, when kids who play organized sports have to stay indoors. Run it just like the little leagues and stuff.

I just feel like there's so many opportunities there to make money without spending much more than the cost of a few TVs and Wii systems.

[Push Upstairs]

Watch out for competition from big stores like Best Buy and such.

I think this was one of the reasons why the store I worked at ultimately closed.

For those of you who are customers don't *EVER* be this guy:

me: "Hi, can I help you find anything?"

that guy: "Yeah, I was just noticing your *two dollar markup* over the Best Buy's prices."

That two dollar "markup" was the $2 above the *cost* of the game that was there to help pay for bills. It's hard to sell your main product at a loss when you bring in maybe $300 a day as opposed to BB pulling in close $50,000-$100,000 a day.

[neogamer]

Let me state this so we don't get off course:

Operating capital and money are not the problem!

I am looking for ideas. I have no problem with cash flow.

Ideas are sacred! Some people have better ideas than others. I look at everything from an "analytical" MBA business education, corporate world aspect. This is NOT good if you are considering opening up a "mom and pop" video game store, believe me. That's why I started this forum. I don't want to miss the BASICS and I do admit I need a little help in this area...

You guys know how you want to be treated in a store. You also know what you like to buy and what you are looking for. I on the other hand, only know my own tastes and what I read about in the Wall Street Journal,etc.

Having 500 copies of Halo 3 for sale isn't going to help a "mom and pop" store (especially if its the scratched limited edition version -) when Best Buy can sell it for $5-$10 less per unit, unless you use it as a "loss leader" (something that gets customers into the store).

This being said, I do once again, appreciate all the replies and help!