Business of Gaming Retail
At one point, I had to look for an alternate location for my game store, War Dogs Game Center. Many possibilities came open. One customer mentioned that a particularly large location--30,000 square feet--was available for $1 per square foot. As it turns out, that's only slightly more than we ended up paying for the 2,000 square foot location we moved into. Incidentally, it's almost next door to the next location the store ended up in when that lease was up, so the location was good, too. It was a very real possibility until we found out that the helpful customer was apparently just making up figures. None of the locations he mentioned were available for anywhere near the prices he described. We stopped listening to him.
Before this revelation, we brainstormed on exactly what we might do with all of this room. For reference, the largest game store I've seen anywhere is Sci-Fi City in Orlando, which was 14,000 square feet at the time I visited (the owner later sublet out 2,500 square feet).
The layout includes one customer entrance and a separate customer exit, much like a Blockbuster Video. Interior fixtures force traffic into a certain pattern designed to circulate through the entire store. A service entrance allows access directly to the employee break area/work station. A back door allows delivery access from an alley behind the building.
The build-out, fixturing, computer hardware/software for this behemoth store exceeds $200,000. Many of the inventory costs are listed with their respective sections, but they bring the total startup costs to over $350,000.
The scary thing is that this plan is entirely feasible at the stated (albeit imaginary) rent.
Cash Wrap (400 sf)
The cash wrap area is angled to be near the exit yet approachable for impulse buys during extended stays. A gated entrance opposite the exterior door allows the clerks to freely exit the cash wrap to assist customers yet clearly indicates what part of the store is "employees only". Multiple POS stations allow for up to three employees to ring up transactions simultaneously.
Video games are held behind the counter. Only their cases are on the shelf for display.
Behind-the-counter equipment includes a drop-safe, price gun and other standard supplies (including paper for the receipt printer, tape for the price gun, and labels for un-barcoded products), customer pulls for comics, and the special request bins. The sell sheet binder, main event schedule, catalogs without a place on the shelf and other sales tools are available here for staff use.
Weapons (1,000 sf)
Slatwall fixtures hold the big stuff, while the knives and smaller items are in glass fixtures. Ideal cases hold a single layer of products under glass for display and keep overstock concealed in the bottom, like jewelry cases. Estimated inventory value for this section is around $8,000, counting on making some large inventory purchases to achieve the best price possible.
New Games (3,000 sf)
Board games, CCGs, and role playing games require shelf and slat wall space. Miniatures require wall or gridwall space. Accessories for all of these games are on the wall here or (in the case of dice) at the cash register. Initial estimated inventory value for this section is $75,000.
Used Games (800 sf)
Each 30 sf allows for 200 titles (at an average $5 each), plus browsing space. A space of 600 sf thus allows for approximately $20,000 worth of inventory, which will turn 1-2 times annually. The remaining 200 sf allows for higher-value collectibles face-out in a locked glass case.
Singles Table (200 sf)
The CCG singles are in binders or boxes locked behind a table where players can casually sit and browse through them (the theory being that sitting customers spend more time than standing customers). The countertop has a separate cash drawer behind it, and an employee has a PC there to look up prices and barcodes and conduct transactions.
An employee monitors the browsing, recommends certain cards, handles trades, and transacts sales. This area should realistically generate $25,000 in cash annually, at an average 60% margin, with built-in measures to prevent over-purchasing and quick liquidation techniques for unproductive product lines. Normally, this station is the primary position for an employee only during weekend shifts. Otherwise, one employee working elsewhere comes here upon customer request to handle transactions.
Initial CCG inventory costs about $10,000, but a good chunk of that is Power 9.
Minis singles are also here, with showpiece on display and inventory behind the counters in deeper boxes. These include not only CMGs but also premium-painted GW and other minis.
Bumper Stickers(20 sf)
The spinner racks hold about $1,000 worth of product at cost and should turn at least 3-4 times per year. Large purchases allow profit margins to approach 70%. The relatively space holds 4 such displays clustered in a box pattern and the browsing room around them.
LAN (1,800 sf)
The LAN area features two tables, each with 4 computers facing each direction.
The PC LAN includes a dedicated server and a separate PC for demonstrating software the company sells. The area also includes two console LANS-one for the X-Box platform and one for Sony games.
LARP Room (2,500 sf)
The LARP room is divided into six compartmented sections, to which the narrator can assign fictional locations in the game. One room might represent downtown, another the beaches, etc. Small breakfast tables and comfortable chairs can be rearranged as the narrator wishes. Radios with headsets allow up to 4 storytellers to communicate between rooms.
At an average of $6 per head for use of the room, the LARP room needs an average of 88 paying players per weekend to break even. The price structure allows for free entry for a certain number of storytellers per game, reduced rates for special events, etc.
The store might also sub-lease the section to a narrator for a flat fee, allowing the narrator to charge a higher entry fee if desired and collect the funds directly.
Supplemental income from drink and snack vending machines in this area accounts for additional $2,500 revenue annually.
Game Room (5,000 sf)
Room for 30 conference tables allows for up to 180 players simultaneously. The room requires at least 5 garbage cans keep the place clean. At the head of the room is another conference table for judges; next to that, dry-erase boards are available for posting pairings, standings and announcements during tournaments. Ten of the tables are taller 4'x 8' tables for miniatures tournaments.
The game room holds different terrain boards to be used for miniatures tournaments or for casual play.
Private Gaming Area (600 sf)
This section features 4 closed-off areas with windows open to the public game room. Each room includes a rectangular table and up to 8 chairs. Use of a private room for 5 hours (effectively one game session) costs $12. Maximum feasible revenue possible is $13,068.
"Royal" Game Room (250 sf)
Hey, with 30k sf, if I want my own game room for me and a few invited friends, I'm darn well going to have it. It's fully equipped with a huge table, comfy chairs, a refrigerator, soft drink fountain, and shelves full of minis and books. This door locks, and I keep the key on me, thanks.
This area does not generate income. It's pure indulgence.
Lockers (100 sf)
With 48 lockers renting out for $9/month, 100% occupancy equals nearly $5,200 in revenue, for one of the highest $/sf ratings in the store.
Materials and labor involved in the building should run less than $600.
Deli/Food station (900 sf)
When moving the store, I estimated that War Dogs generated $40,000 per year in food sales to the immediate area between customers and employees. If the store can capture a significant portion of those sales, the additional revenue would be a nice boost to the bottom line. An external sign, a separate phone book listing, and easy access allow the deli to not only supplement income but bring in additional, non-gamer traffic. The deli should be able to generate at least $120,000 in annual revenues at a gross 20-25% profit margin.
The deli offers sandwiches, wraps, chips, wings, individual pizzas, and a rotating menu of additional items. It includes a fountain drink machine and a wide variety of exotic bottled drinks in a cooler.
Equipment and initial inventory costs require about a $20,000 investment. Apparel & Accessories (400 sf)
This section offers gaming- or fandom-related t-shirts, book bags, baseball caps, and other items from a variety of suppliers.
Comics (1,500 sf)
About $30,000 of new and used inventory and accessories in boxes and on shelves.
Toys (2,000 sf)
Busts, action figures and other toys in all price ranges. This section uses traditional retail gondolas. Higher-end products will be behind locked glass cases and require employee attention.
Novels (1,000 sf)
The main focus lies in science fiction, fantasy and horror, with a special emphasis on game-related and licensed fiction. The store offers new and used titles.
Used Console Games (2,000 sf)
Console game cases on movie video-style shelves allow customers to choose a game without having access to the actual product. Customers take the cases to the counter where they exchange it for the actual game. Games are shelved alphabetically by platform.
A buyer at the counter buys used video games according to a company price guide.
Initial inventory should be about $12,000 and should grow considerably from customer purchases.
This section also includes displays for new and used consoles, guides and other accessory items.
DVDs (2,500 sf)
DVDs and other media on traditional fixtures. This section is divided by genre: drama, action, horror, sci-fi/fantasy, anime, children's, documentary, etc. As with most things, we sell new and used.
Mini-Theatre (1,900 sf)
A giant TV screen and theatre-style seating provide just about all that's needed. While the main intention is to support a local anime club, other groups can rent the room for their own entertainment. Uh, no adult videos, please.
This room could also double as a seminar hall for conventions the store hosts.
Art Gallery (300 sf)
This section features art prints and originals in a combination of poster-style fixtures and frame-suitable art. Merchandise includes prints and originals of all sizes and price ranges, including unique items like original iconic D&D art. It might include unique items such as books from "named" collections-I'd love to have the Jiardini Player's Handbook, for example, or a copy of the Magic card "Marriage Proposal."
This area would have to struggle to earn its keep based on sales, but I believe the prestige would justify its existence. The competitive edge element alone is potent. If you have a choice between the vanilla game store down the street, and the game store that has the original art for the Juzam Djinn, where do you shop?
Dedicated Demo Tables (600 sf)
Terrain set up on this table allows for an instant field of battle to introduce new players to the hobby. Placed near the entrance, the goal is to get every new customer to play one 5-minute game. Games Workshop's stores use this concept as the key tenet to their stores that average $100,000+ annually through their product lines alone.
If we attribute the table to customer conversion, we need to turn 10 walk-ins per year into regular miniatures gamers in order to meet the area's sales goal.
The assumption is for two tables: one to promote Games Workshop or other miniatures and the other to promote the latest impulse-priced card game, like Fluxx.
Promotional materials cost for both tables costs about $400, including the price of the tables. For a slightly greater price, we could include drawers below the table, filled with different miniature game setups.
Demo Video Stands
The computer monitor shows various products available for sale in a video loop, with sales information edited onto the video. This might include PowerPoint presentations prepared in the store and other commercial material. These monitors rest on existing shelving or hang from the ceiling, requiring no dedicated floor space.
Work/break area (500 sf)
This area includes a refrigerator, microwave, vending machines, a TV, and a table for off-duty employees to eat, read, study work-related material, etc.
The shrink-wrap machine and packing supplies are here for Internet sales. Used games are priced here, demo copies re-shrinked, and damaged product stored here for return to the distributor.
A full-time minis painter uses store supplies to paint individual pieces and armies on commission and for spec sales both in the store and at online auctions.
Storage Area (500 sf)
Overstock merchandise and off-site inventory is stored in a locked room. These sales are a mix of low-margin, loss items (discontinued or clearance inventory), and high-margin used product that work well to increase the overall profitability of the store. This work area should account for at least $15,000 worth of annual sales in its own right, even though the in-store sales are relegated to other areas.
Restrooms (300 sf)
Separate restrooms for men & women. This area also includes the cleaning supply closet.
Office (300 sf)
The office contains the owner/manager work station and one other employee work station (usually a full-time eBay sales handler). It holds all the typical office equipment and supplies. The owner can track sales here through the POS, monitor the store through video surveillance, and otherwise keep an eye on the store while engaged in other activities.
Wasted (1,030 sf)
I have to assume that out of a space this big, you lose at least 1,000 square feet due to odd corners, wasted space, support pillars, interior walls, etc. The odd 30 square feet is just to bring the total up where it should be.
I don't think I even accounted for all of the space allowed, but it's already a giant store. If you want to add your own suggestion, mention it in the forum.
Lloyd
www.lloydwrites.com
