TERRITORY REPORT: Benelux & Nordic

BENELUX

Population: 27,970,600
Countries: Belgium, The Netherlands, Luxembourg
Currency: Euro
Languages: Dutch, French, German, Luxembourgish,
Key retailers: 12Game.com, Bart Smit, Bol.com, Carrefour, Collishop.be, Colruyt, Cora, DelHaize, Dixons, Dreamland, Dynabyte, FNAC, Free Record Shop, Fun, Gamemania, Intertoys, Makro, Mediamarkt/Saturn, Music Store, Smartoys, Supra Center, Traffic, V&D, Wehkamp
Distributors: ABC Soft, BEMs, Big Ben, CLD Distribution, DIES, EBS-Benelux, Favour Games, Gameworld, Hermans Retail, Home Entertainment Group, Horelec, Micromedia, MMS, PB Projects/Saltoo, Rigu Sound, VSN

NORDIC

Population: 25,218,000
Countries: Denmark, Finland, Norway, Sweden
Currencies: Euro, Danish Krone, Norwegian Krone, Swedish Krona
Languages: Danish, Finnish, Swedish, Norwegian
Key retailers: Antilla, Bilka, Blockbuster, CDON, Citymarket, Coop, Discshop, Elkjp, F-Group, GAME, GameStop, Mediamarket, OnOff, Spaceworld, Stereostudio, Top Toy, Webhallen
Distributors: Also, Amo, Bergsala, Game Outlet, Koch Media, Massemedia, MPX.no, Nordic Games Supply, Nordisk Film, Panvision, PH/Elap Distribution, Plan 1, Platekompaniet, SIBA, Wendros

Both the Benelux and Nordic games markets are victims of their own diversity.

The former is comprised of three neighbouring countries (Belgium, the Netherlands and Luxembourg), while the latter is less of a recognised entity and more of an umbrella term given to an area of Northern Europe.

Naturally, this means that when it comes to publishing, distributing and retailing video games complications arise when targeting such a broad range of consumers, languages and cultures.

The main characteristic of our territory is that we have to deal with a wildly multi-lingual market: Dutch in the Netherlands and Belgium, French and German in both Belgium and Luxembourg,” says CLD Distribution CEO Jacques Leboutte.

We also have to cope with a lot of different retailers – particularly in Belgium and Luxembourg – on a quite tiny market of around 25m people.”

Leboutte says varying tastes within these small markets doesn’t help either, anecdotally highlighting how southern Belgium’s appetite for manga-based titles like Dragon Ball is in complete contrast to that of their northern neighbours.

In fact, according to GfK figures, the biggest game overall in Nordic countries was Call of Duty. But in Sweden, World of Warcaft and Kinect were the biggest sellers.

Rising to the challenge

Firms in these regions are used to such intricacies but the economic decline of the last few years have made things much more difficult. Businesses have been forced to find new strategies that will help them grow, or at least stay afloat.

The video games industry in Europe faced some hard financial challenges during 2010, and Benelux was no exception,” says Michel van Elmpt, managing director of publisher Easy Interactive.

It was a tough year for the whole industry, with many companies bringing in lower turnovers in our home region. Alongside the financial pressures, the lack of new consoles on the market and the handhelds nearing the end of their lifecycles definitely caused a depressed level of consumer interest.”

Because of the falling sales, retailers and distributors are being more selective on the games they stock.

As the market declines, there has been less room for B and C titles,” says Hans Large, general manager for Koch Media in Benelux. There is a strong focus on triple-A titles and franchises, with budget games performing well. The segment in-between is under pressure.”

Leboutte agrees: The market is challenging for publishers, distributors and wholesalers.

With the number of SKUs required often double or even triple that of France or the UK, it’s important to have a relevant logistic organisation and a fine-tuning commercial team.

You need the right products in the right quantities in order to function in this market.”

Publishers have to be just as careful in this increasingly competitive environment, working even closer with the High Street to secure product space.

The majority of retailers have been able to lower their stock positions thanks to publishers adjusting their minimum orders. This helped to sustain the market and improve margins,” says van Elmpt.

Distributors have to be more discriminating, which means that publishers like us have to be more strategic with above-the-line spends.”

Despite this, there was impressive growth among retailers over the past year in Benelux. Gamemania opened more than 50 new shops in the Netherlands, while Belgian chain Smartoys opened its 25th shop.

Lost in translation

It’s a similar story in the Nordic regions: Denmark and the Scandinavian trio of Norway, Finland and Sweden. While the industry has felt the strain of recession, careful planning has ensured that many titles still return a tidy profit.

Retailers focus more on strong titles, as well as budget and pre-owned games,” says Martin Sirc, GM of Koch Media’s Nordic office. Any titles in-between tend to suffer and often fail to get listed everywhere.

The Nordic market consists of four different languages which further complicates things – just try fitting a four-language blurb on the back of a DS game.”

When working in a market that is considerably more fragmented than that of the UK, strategy becomes key and margins for error grow smaller. But the games industry in Benelux and Nordic is so accustomed to juggling consumer tastes and trends that economic troubles are just another challenge, rather than a burden.