Riding the games wave

Riding the explosion of interest in computer games, the franchised Gametraders chain has emerged as one of the fastest growing retailers in Australia. By Matt Stirling.

ON THE FACE of it, Mark Langford would seem an unlikely founder of a computer games retailing business turning over more than $45 million a year. At 51, he is not a member of generation X or Y, and freely concedes that gaming is not a deep personal interest.
But with a chain of 47 franchised Gametraders outlets across Australia, Langford has certainly demonstrated a remarkable acumen in building a business that has become a runaway success for the one-time real estate agent.

Returning to Adelaide in 2000 after a successful stint in the Cairns real estate business, Langford wanted a change in career and started a small leisure retail shop in a converted petrol station in Adelaide, selling board games, video games and tabletop games.

But instant success didn’t follow. “We started the retail concept and made all of the classic errors – it was the wrong location, and the product mix was wrong. We had computer games and warhammer and board games and kites. It was like a leisure shop and that business model was never going to succeed,” he said.

But you can sometimes get lucky in business. The Pokemon craze in late 2000 made him realise the potential of second hand trading. He began to buy and sell individual, second hand cards to his young patrons who, in turn, could buy specific cards from him rather than rely on the costly guesswork of buying entire booster packs.

Business boomed as the devoted Pokemon fans sold, bought and traded with Langford.

Then, as suddenly as it had arrived, the Pokemon craze was over. The experience however had led to him having what he describes as a “lightbulb idea”. “I thought why not try this trading idea with second hand games. And that’s when the Gametraders idea came from. So I said to the kids and their parents, bring in all the old games you don’t use anymore, and I’ll buy them off you for cash.”

What followed was a self-described “overnight success”. From an unsteady debut in the retail world, Gametraders exploded with a ten-fold growth rate in 2000-2001, Langford opened his first franchise a year after he started, and has since driven the company forward with an annual sales growth of 74 per cent over the past three years.

Although initially focused on buying and selling second hand games, the release of the newer generation video game consoles, such as the Playstation 2 in 2000, caused the business to quickly shift to dealing in new games and games equipment.

“When the Playstation 2 came out we noticed a levelling off in our growth, in fact a slight downward trend in our growth. That’s because people wanted the PS2, we didn’t have it; we didn’t sell new games or consoles. We then realised that we had to get new games in and all this stuff on the PS2. It was a challenging time because franchisees don’t like change particularly.”

Most of the Gametraders’ revenues are now generated from selling new games and equipment, although Langford says they are “sticking to our roots where we take anything to do with gaming and trade it in”.