At the gates of the beginning of the new generation, we chatted with those responsible for the Xtralife chain to explain their procedures.
September 16, at the edge of midnight, ends the long-awaited PlayStation Showcase where Sony deployed its entire arsenal of games for PS5 and, above all, what it had been waiting for so long: date and price. When some were turning off the lights to go to sleep, the alarms of some well-known chain stores in Spain began to go off, such as GAME, which was the first to kick off reservations. “Available now”, but just barely.
Saturated web portals, individual tension not to be left out of what was supposed to be a very limited batch. So it was; apologies through. While the media reported the availability of PS5 and PS5 Digital Edition reservations, the “sold out” sign began to be seen and the purchase actions were not processed. Microsoft gave more time, gave notice and established fixed hours for everyone. Things were better, but not much; this time not for lack of planning, but for a total limitation of supply.
The demand beat the offer by a landslide.
Now, how do these processes work in stores? How do you live that moment inside? What about the relationship with the manufacturers? We have had a long conversation by videoconference with the heads of Xtralife, an online business that has been operating for thirteen years in Spain, so that they can explain us how things are from the other side and that we all learn a little more about these complexes processes.
For this we have had Jitain Chugani, original co-founder of the chain; and Aitor Brunet, Logistic Manager of the store and responsible for communication with customers. Xtralife was founded in 2007 and is presented in Spain as one of the pioneers of ecommerce focused on video games and digital software. Three generations of consoles with which you are on the way. They are part of a parent company founded in 1989 with which they merged; While for two years they have been working with a new, more attractive website, with more navigation tools and, most importantly, more capacity to manage a market where there are dozens of products and thousands of customers every month.
PS5 and Xbox Series: fewer consoles than desired
FreeGameTips: How have things been? Did you expect such a high demand considering the circumstances?
Jitain: Yes, mainly because we already had some clues of how things were from last year, when most of the reservations corresponded to the most important titles. But we have noticed that some of the more powerful releases that were announced almost three or four years ago were being delayed. So it seems that the generations are getting longer. It is therefore understood that the large manufacturers want to make the most of these productions and that there is a very large implantation of consoles thanks to these titles. For example, Cyberpunk 2077, which coincides with the end of the generation and the launch of the new consoles (intergenerational); so you will have copies for both of you.
Xtralife cover: recent and upcoming releases, booking incentives …
We also expected a very high demand for the new consoles because since 2019 we noticed many more aggressive offers, where prices were going down (Black Friday, Christmas …) and people were buying games from the “bottom of the catalog” more cautiously, I’d say, almost indirectly telling us that they were looking forward to what’s to come, PS5 and Xbox Series. The technology leaps are now being much more important than before, but, to be honest, despite the clues we had, all this has far exceeded our expectations.
Starting in June we launched our landing pages in Xtralife [secciones y páginas dedicadas] for both PS5 and Xbox Series and we had a newsletter [correos electrónicos con novedades de carácter periódico] so that interested customers were the first to know everything about opening reservations. That helped us to probe that interest. Actually, the number of users who signed up for those notifications was much higher than we expected.
Aitor: The questions about the demand for the console are constant. Many, many. I also have to say that people really want the console, but they know that the launch is going to be very complicated; There are people who know, based on the launch of previous machines, the difficulties that all these moments entail in order to get one.
Since when did you start to have information from Sony and Microsoft about the number of consoles that you were going to have at this launch? How is this relationship with companies?
Jitain: The first thing I have to say is that we have a very close relationship with both companies; We have been working with each one for three decades. It is true that each one changes its working methods over time, depending on what comes from above, I mean the headquarters [sedes centrales], which define the work protocols that evolve over the years, but with both companies at the national level, the relationship is very close.
PS5 and PS5 Digital Edition, sold out within minutes of opening reservations.
Each, Sony and Microsoft, have had a slightly different way of running it. I’m talking about how, in the past, Xtralife tried to streamline the reservation opening process, to be quick, because that’s what people want. We try to do what we can to get the information as quickly as possible from both the manufacturer and the supplier of the commercial part. For example, we need operational data; we need to know what the final price is, the launch date, if there are discrepancies between the information in the press release and reality … Note that in the past they have even cut off our fingers for precipitating that reservation opening a bit and We have come to reserve many more units than they were assigned. In those cases we have had bad luck and it can give a bad image to the client and send him that message that we have to cancel his reservation. Sometimes the client gets it; in others it says “why?”
You see, things are not so simple because they depend on the manufacturer worldwide, not national, and the easiest way to make that estimate – they cannot know the previous demand always correct – is through distributions. Each territory has a distribution percentage, which represents each territory at the market level in this world. Spain is X percent and each customer (store) has a weight; therefore, each store is assigned a certain number of units.
We are very careful not to open the reservation until we know 100% the limit of units that we will have and thus avoid a bad experience with the end user.
Aitor: In my case, I don’t deal with suppliers, but I deal much more with customers and with the movement of orders. In this generation I have realized that the myth of “X store has opened such” has been curious, because the stores have learned about the images and data, such as date and price, almost simultaneously with the opening of the stores. Bookings. They have been very tight on this. We have had to adapt super fast to publish and update everything because the information has dropped by dropper, we are the first to be surprised.
Jitain: I would say it is because of this, the leaks. I think they have been more aware than ever that someone on their staff could reveal or leak some detail or confidential information. Whatever, that’s why they have been much more strict. We also sign NDA [documentos de acuerdo de confidencialidad]They are much stricter when it comes to disclosing information even with us, than just “lifelong customers”. Before we talked about embargo days and dates, while now we only have it for video games; for consoles we really learned a lot of things as they were released for the whole world.
Aitor: Before they used to anticipate things a day in advance. Not now (laughs), we have to go very fast because we found out almost at the same time as the rest of the world.
Xbox Series X and Xbox Series S, very different bets for different audiences.
Approximately, can you tell us about the amount or volume of reservations for PS5 and Xbox Series?
Jitain: For confidentiality reasons we cannot give specific data on any product, but what we can say is that during June, we understood that, as there was going to be a longer E3 during the summer, everything was going to be delayed. That’s when we started talking to companies to find out a real, tangible interest. Each client works differently, so we only knew the number of clients who joined our newsletter to receive information; the number of calls, chats, etc. All this helped us to know a key data that is the number of users who have shown a tangible interest in the reservation or the PS5 or Xbox Series X.
This data was constantly being updated. With these data, the companies were able to have a more approximate and clearer image of the demand they were going to have for each business; in this case, Xtralife. And this is how we work on the number of units that we have finally had. Obviously we would have liked to have many more, but the situation has been the same for all.
The two companies have done a fantastic job adapting, I have to say, and they have trusted Xtralife once again because they know that we work very well on the reservation issue; we are a good barometer for you to know how some video games and others can work. When speaking here of amounts as high as a console, it was important to know the purchase predisposition.
Do you have any hope or certainty that you will have more units for the launch or is it technically impossible now?
Aitor: It’s impossible to know because they don’t know it themselves. With the current situation we have to be grateful that both providers, even knowing that they will not be able to satisfy the total demand, are constantly updating us on how things are going, the units to receive. They are doing what they can.
For the first time in history we are going to have a solely digital solution of the two new proposals from Sony and Microsoft. How has your reception been?
Jitain: The demand is very, very high in favor of disc player options. We already had an Xbox in the past [Xbox One S All-Digital] which was very successful, especially when Microsoft lowered it on Black Friday very aggressively and competitively. It was moderately successful, we did notice that there were many of them buyers who already had a PS4 who wanted to play Xbox exclusive titles and open up to Xbox Game Pass. But this generation, honestly, the demand for disc player consoles has initially been much higher.
The “digital only” alternatives do not excite so-called ‘early adopters’.
Aitor: Realize that people who want an exit console, in advance, are a type of buyer who wants the most; They are people who are looking for the best and who have been waiting for these consoles for a long time, with their money saved … They are not looking for the offer, but the top of the range, that has everything. In both brands, the album has been way ahead.
Jitain: Also, the version with an Xbox disc reader has 1 TB and the version without a disc reader has 512 GB; that has also favored Series X.
The price of the games has not affected the percentage level in the reserves
Let’s talk about games. The rise in price of games, has it had a real impact on your bookings? They have fallen?
Jitain: Honestly, no. There have been complaints, but there have really been more questions than complaints. We’ve had clues for months that the games were going to go up slightly in price. We are talking about productions that sometimes cost more to make than movies. Ubisoft, for example, has said that it will keep prices at the same price between the current and the new generation. We will see what happens, if the prices are in line with what is current or not, but we have not noticed that there has been a lower volume of bookings from the large launches due to that rise.
Xbox Series S is the only one with a little more availability.
For our part, we wanted to be able to include something interesting in the reservations of those games and we have made a great effort at the marketing level to add some detail with the reservation of the important games. I’m talking about games like Cyberpunk or Demon’s Souls, with which we are giving away a t-shirt; with Spider-Man also, that we are giving away a comic… We try to make everything more attractive for the consumer who wants to make a reservation so that it is a more interesting product.
For game and console reservations we act differently because there are users who have already reserved the console elsewhere and nevertheless want to do the same with us in the games. In the case of consoles we can have console bundles plus some merchandising; And then we have the console bundles and one of the new video games so you can save yourself some money when you buy everything at once.
Aitor: On the way out, you have to convince yourself of few things (laughs). Right now getting it is already a triumph.
Jitain: With Xbox Series X we had a lot of planning time with Microsoft, we are giving away an official Halo minifigure and t-shirt. We include both gifts with the reservation. Apart from that, the usual policy: loyalty points to save money on the next things. We know that it is a very important investment, so we want the regular user to have some benefit for the next one.
Distribution: processing, final purchase management and arrival of the product at home
Let’s put ourselves in the event that the user has already made the reservation. What happens now? To what extent do you know that this user is going to safely receive the pre-purchased unit at home on launch day?
Aitor: We work with several shipping companies to guarantee it. In these cases we have very little room for maneuver because everything is shipped the day before, but I can tell you that in our case the percentage of shipments in 24 hours is very high, very high. Last year we were around 93-94%; and when this is not the case, it is usually because the client is not at home at the time. We provide information on the status of the order at all times to the client so that he knows where he is and in what situation. They are automatic notifications with the option to track the package. Before, when things were not so controlled, we could get things to the customer even two or three days before their launch date. We are now working towards the launch day [de PS5 y Xbox Series X|S] go all the best possible and there are no incidents.
Jitain: With this we have many clients buying with us. We also have the option of choosing the shipping agency for the consumer. SEUR, Tipsa, Correos Express, iPack… The user who buys with us already knows which carrier is best for him depending on where he lives, so in the purchase process we give that option. This helps a lot to guarantee and improve our delivery rate in 24 hours.
Cyberpunk 2077 and Assassin’s Creed Valhalla, of the most chosen options for both launch consoles.
What about the Canary Islands? Do they have the same 24-hour warranty? It’s more complicated?
Aitor: Yes, it is more complicated. Before, as some games could be delivered days in advance of their departure, we could be more sure that they would arrive exactly on the day of departure, but now it is more complicated because we receive everything very fairly. In the Balearic Islands it has improved a lot, it is almost always 24 hours; but the Canary Islands is a bit more complicated. Anyway, clients who are not from the Peninsula are used to this kind of thing and we don’t usually have a problem. Even so, we have a percentage of clients from those areas.
Jitain: The Valencian Community, for example, has had the launch of FIFA 21 on a public holiday, they have asked us a lot about the type of delivery, so each case we have to see it individually to be able to synchronize with the merchant in order to be able to offer the product to the user as soon as possible. Can the shipment be advanced to the day before the holiday? And we are looking to ensure that everyone can start playing. All of that requires planning.
Of all the players who have bought a PS5 or an Xbox, how many games have they bought on average to accompany the console? Has the Xbox Game Pass effect been noticed with Xbox?
Aitor: In the case of Xbox, Assassin’s and Cyberpunk continue to throw a lot and have reserved the same, they want to take the console and play to the max. These are not in Game Pass and these are two of the most powerful launch games. We too have been surprised.
Jitain: With PS5, both Cyberpunk 2077 and Assassin’s Creed Valhalla – especially when they gave their release date – have had very high pre-orders. Another, for example, is Demon’s Souls, it is surprising me in a surprised way. Many people who are reserving the console are also taking Demon’s Souls.
What about Marvel’s Spider-Man?
Jitain: Same. We do not know with much certainty if they already have the original, but having the option to buy Miles Morales with the original game in another version and that it was a very well received title with its first installment, we are sure that these initial symptoms will only go to more.
Finally, it must be said that all these processes are very important and we cannot forget that those who are behind the companies are people. They are very long procedures and manufacturers are making a very great effort to make it possible. Sometimes we import games that are not sold in our region, customs involved… And yet, even with a pandemic, we have all had to adapt to working conditions from home. We are very happy with how things have turned out. We hope and hope that by the end of the year or the beginning of 2021 we will have more units to be able to satisfy that demand; between December or January.
Aitor: One thing we are grateful for is that, despite the hype, there has been a lot of good vibes from our users, a lot of enthusiasm. There have been other much tougher pitches despite the difficulties we have now. It has been much easier this time.
