It is a cloudy September day and Game’s store managers are bubbling with excitement as they feast on the Christmas games releases about to hit the market. The Excel exhibition centre in London has been turned into a gamer’s paradise for the company’s annual store managers’ conference. New editions of Tomb Raider and Gears of War are on display in the hall, and Game’s employees look like kids in a sweet shop. What’s more, chief executive Lisa Morgan is no different.
It was as a buyer for electricals retailer Tandy in the early 1990s that Morgan developed a love of games and her knowledge and passion for the industry propelled her into the top job of one of this year’s biggest retail success stories – Game.
The 1,161-store retailer – which operates in six countries – revealed pre-tax profits of£68.4 million for the year to January 31, which some analysts believe could rocket to£130 million this year.
And it is Morgan who, with her knack for spotting the next big gaming sensation, has helped steer the company to such dizzy heights. In 2002, for example, at US games conference E3, she spotted a sure-fire hit in karaoke game SingStar. “With SingStar, we were so excited about how we could start appealing to the female customer more and driving the industry forward,” she says.
But there was just one obstacle: the predominantly male store managers did not share her enthusiasm. So Morgan, one of only a handful of female chief executives in retail, held an event for staff to try it out. “They absolutely threw themselves into it,” recalls Morgan. “At the end of the evening, they required no convincing.” SingStar went on to sell 2 million units after its release in May 2004 and, along with the arrival of Nintendo’s Wii two years later, it marked a step change in the gaming market, according to Morgan.
“Before this point, games were all about racing or kicking a ball. Now it’s about dancing, singing and jumping’” she says. “The gaming industry has changed beyond recognition and these products bought a host of new customers into our stores.”
And the figures show it. In June 2003, 24 per cent of Game’s customers were female. Today that figure is 33 per cent. And other retailers are becoming aware of the burgeoning appetite consumers, regardless of gender or age, have for games. HMV, Zavvi and Woolworths have all ramped up space in their stores for the products, as have the supermarkets.
Yet analysts believe Game holds more than 30 per cent of the market and Morgan, who has been with the retailer 11 years, says the key to Game’s success is the fact that its offering is “100 per cent centred around the consumer”. She adds: “We are constantly thinking: ‘How can we make this experience better for the customer?’ Whether it be maracas – exclusive to Game – for Samba de Amigo, or exclusive box sets.”
It is not just add-ons that distinguish Game from its rivals, but its knowledge of its customers, according to Morgan. Through its reward scheme, the retailer has access to 10 million customer records. The initiative has proved such a success it is planning to launch a similar one for its sister brand Gamestation. “Understanding our customers has to be a priority,” she says.
Game’s pre-owned offer – where customers can trade in second-hand items in stores – that has really helped lift profits. The process enables Game to increase its back catalogue, while giving customers an affordable way to buy games. “People of all ages are trading in to save money,” says Morgan.
But how long can this success continue? Gaming retailers are led by the release schedule, but there is no new hardware due for a good few years yet, prompting some to argue that this cycle’s peak has been and gone. Not so, says Morgan, who points out that in the past year, 6 million next-generation machines have been sold. “That’s 6 million more customers, so the demand is still there. And there’s no shortage of new product coming to market, so we feel very upbeat about this Christmas – and next year too.”
Game reveals its interim results for the 26 weeks to July 26 next week and, with expectations so high, what games does Morgan play to take her mind off things? Even though she denies she has any musical talent, it is the singalong games she favours, such as SingStar, newcomer Lips and Rockband. And she’s confident that these, and games in general, will continue to sell, despite the downturn. She says: “We may be selling a commodity product, but it’s a pretty exciting commodity product.” She’s clearly not the only one who thinks so.
Morgan’s Top Score
Family: married, with two step-daughters
Interests: horse riding – particularly dressage
Education: Btech in Business & Finance
January 2007 to present: group chief executive, Game
2003-06: deputy chief executive, Game
2000-03: commercial director, Game
1997-2000: head of buying, then buying director, then buying and marketing director, Electronics Boutique (now Game)
1993-97: senior buyer, then group software buyer, Dixons
1993: senior buyer, Future Zone (later Electronics Boutique)
1989-1993: buyer, Tandy