Play N Trade sells more than 200 franchises
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Franchisor takes community-minded approach to gaming
By George T. Chronis -- Video Business, 4/20/2007
APRIL 20 | Videogame franchisor Play N Trade has sold more than 200 franchises, with 40 stores already open and a goal of 500 outlets by the end of 2008.
The company is taking a community-minded approach to a retail market dominated by such corporate players as Best Buy, Wal-Mart and GameStop.
All Play N Trade stores are independently owned, with no corporate locations. The model the company is selling is one of stores where gamers can mingle with other gamers, chat intensely with the staff about gameplay and test play any game in stock.
Most Play N Trade stores average between 1,200 and 1,400 square feet in strip or conventional malls. Corporate provides unified training, merchandising, real estate, marketing and vendor support, plus a proprietary point-of-sale register system that can manage used game sales. Franchisees are then set up with a group of hardware and software vendors that offers cost breaks to Play N Trade stores. CEO Yuvi Shmul says it costs franchisees about $150,000 to open a location.
The company was incorporated in 2003 and has sold more than 200 franchises nationally. It expects all of those stores to be open by the end of the year.
Andrew Wang left his real estate business to open a Play N Trade franchise in Buena Park, Calif., last December. Close to Cypress College, the location has not wanted for customer traffic and drew more than 100 people for an in-store tournament three weeks after opening.
Today, Wang says his traffic continues to grow, with his regular customers buying three to four games per week. Software accounts for around 70% of his sales, and Wang says he sells more used games than new. Unlike GameStop, which will drop $5 off the MSRP of a used but recently released title, Wang will sell the same used game for $10 less than the original MSRP.
So far Wang’s biggest gripe is how ill-prepared he was for how tight the supply of Nintendo Wii systems would be.
“At the time, I was angry, but now I understand much better how the business works,” he said. “Today I have five to six vendors I’m constantly working with to get stock in.”
Five months into videogame retailing, Wang plans to open a second Play N Trade within a five-mile radius of his existing store.
