Black Friday has expanded into a month-long savings holiday for some retailers. This year, the video game industry is banking on Black Friday and Cyber Monday deals—along with the week leading into and out of them—to help get an extra boost heading into the crucial fourth quarter.
“We coined the term ‘Black November’ five years ago because we saw this expansion coming,” Newegg North America Chief Marketing Officer Soren Mills said.
Video game research firm Newzoo forecast global game revenues across all categories will top $81.4 billion this year. As much as one-quarter of annual game sales are generated in the fourth quarter, thanks in part to the huge sales around Thanksgiving.
Video games are ranked fifth among the top five tech products consumers plan to purchase between Thanksgiving and Cyber Monday, according to a new survey by the Consumer Electronics Association (CEA). But gaming is also a key component to the four other hot tech items—tablets, televisions, laptops and smartphones. CEA expects 36% of U.S. adults—89 million Americans in all—to buy electronics products over Thanksgiving weekend, up 5% over 2013.
Larry Plotnick, category leader for Amazon Video Games (AMZN), said what differentiates this year from others is better deals on a broader range of platforms with more content available for the PS4 and Xbox One a year after release. He said deals are also being offered throughout the season rather than being confined to one or two hot shopping days. And there are more hardware and software bundles to go around this year.
Hardware bundles abound
“Bundles that offer games, accessories, or other digital content give customers what they need to make the most of their video game experience,” Plotnick said.
“Black Friday is one of the busiest days of the year for us, and we have an aggressive plan for those days,” Bob Puzon, senior vice president of merchandising at GameStop (GME) said. “The market expands a lot for us during the holidays and we expect huge traffic in-store, but also have great expectations for our multichannel business.”
GameStop bucks the growing trend of retailers staying open on Thanksgiving this year. But over 4,000 stores will open at midnight on November 28 with other locations opening at 5 a.m. The leading specialty video game retailer is reducing the prices of top current gen and next gen games from Electronic Arts, Microsoft, Sony, Disney Interactive and Sega by $20 to $30, and offering bundles like an Xbox One with Assassin’s Creed Unity and Assassin’s Creed IV: Black Flag for $330, a PlayStation 4 with The Last of Us and Grand Theft Auto V for $400 and an Xbox 360 with Call of Duty: Ghosts and Call of Duty: Black Ops II for $200.
Puzon said GameStop expects to offer more than $250 million in trade credit this quarter.
Wal-Mart (WMT) began matching some Black Friday sales from competitors on November 21. The retailer saw 22 million customers shop on Thanksgiving last year, and it’s extending the holiday this year with deals beginning early Thursday and lasting through Monday this year.
“We’ve increased Black Friday inventory in every category, including hardware bundles,” Wal-Mart senior vice president of Entertainment Laura Phillips said. “We have tripled the amount of PlayStation 4 and other gaming consoles available.”
Best Buy (BBY) is offering a $430 Xbox One bundle that includes two Assassin’s Creed games, Dance Central Spotlight and a free controller. The retailer also has a Wii U Super Mario 3D World Bundle with Super Smash Bros. and Donkey Kong Country: Tropical Freeze for $360. And clothing retailer Kohl’s (KSS), which isn’t known as a video game destination, is selling a Nintendo 3DS XL Mario Party: Island Tour Bundle for $150.
Online and mobile changing the game
While customers still camp out in search of the best brick-and-mortar deals, more people are avoiding the lines and shopping from home. The CEA reports that a record-breaking 103.3 million U.S. consumers, or 42% of all Americans, will shop online between Thanksgiving and Cyber Monday this year, an increase of 6.1 million shoppers over 2013. In total, 143 million U.S. consumers plan to shop over the Thanksgiving holiday weekend, with 89 million U.S. adults planning to buy consumer technology products.
“With the help of mobile devices, this year will be online shopping’s biggest Black Friday weekend yet,” CEA chief economist Shawn DuBravac said. “We expect to see more consumers than ever turn to their mobile devices to learn about sales and discounts during the holiday weekend.” DuBravac adds that retailers are focused on delivering shopping experiences across multiple channels, including in-stores, online and on mobile.
With the increase in mobile and online games, this weekend is opening new opportunities for game developers to connect directly with gamers. Among all U.S. adults, 29% said they’ll search for deals on social media sites, 27% will use apps on their smartphones or tablets and 14% will turn to text notifications, according to the CEA survey.
“As we advance towards a focus on digital distribution and mobile games, the social impact of Black Friday and Cyber Monday is becoming more important than ever,” co-founder of Ninja Metrics Dmitri Williams said. “Mobile and digital developers are using the holiday sales opportunity to leverage their most influential players to increase spending. Social influence during Black Friday and Cyber Monday can account for up to 40% of all spending within games.”
Whether the thrill of finding the best deal comes from navigating crowded parking lots, sliding a finger across a smartphone or searching the Internet on a laptop or tablet; the end reward remains worth the effort for early holiday shoppers.
