Marketing Exchange Presentation

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Marketing Exchange Presentation December 16, 2004
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AGENDA

• EB GAMES Overview
• The Experience Economy
• How we do it at EB GAMES
• What Does This Mean for YOU?

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1) EB GAMES Overview
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Company Overview

• Leading specialty retailer of electronic games in
  the world!
• 2,000 stores split evenly between malls and
  strips. Stores in 9 Countries.
• 2 billion in yearly sales
• Opening over 400 stores a year
• Founded in 1977 at King of Prussia Mall

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Demographics

• Typical EB Consumer
• Sex Male
• Ages 18-30
• HH Income 35,000-49,999
• Employed Full Time
• Some College Education

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Psychographics

• Extreme Early Adopters
• Purchase Influencers
• Trend Setters
• Very Passionate about Gaming

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Avid Gamers vs. Casual Gamers

• Avid Gamers Spend Significant hours a week
  playing video games (Core
  plays 19 hours per week)
• Avid Gamers are 11 of Users but 53 of Sales,
  Purchase 12 titles a year, own multiple systems
  and visit EB once a week.
• Casual Gamers are a larger group but buy less.
  This is a growing segment as we begin to build
  more strip stores

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Competition

• There are 20,000 25,000 locations that sell
  video games.
• Key Types of Competition
• Mass Merchandisers
• Toy Stores
• Specialty Video Game Stores
• Electronic Superstores
• Internet
• Video Rental Stores

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EB GAMES Point of Difference

• Pre-Played Games
• Trade-In Old Games for Cash/Credit
• Reserve New Releases
• New Releases in Store Day 1
• Selection of Games
• Store Associates are Gaming Experts
• Location, Location, Location
• Community for Gamers (Starbucks)

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Pre-played Business

• Biggest differentiating factor
• Highest profit margin category
• Biggest competitive advantage
• Continue to grow at faster rate than overall
  business
• Higher percentage of pre-played business in
  strip
• center stores

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Pricing Options
EB Options Competitors - 29.99
- 49.99 with one or New Release
more trades - 39.99 - 44.99 pre-played -
49.99 New Release
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2) The Experience Economy
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Economic Shifts Over Time

• Agriculture Economy
• Industrial Economy
• Service Economy
• Experience
  Economy

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What is the Experience Economy

• The 4th Economic Offering
• Every Business is a Stagetherefore work is
  Theatre
• Memorable Events that a company stages and
  charges extra for
• Restaurants become Eatertainment Stores become
  Shoppertainment

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Economic Offerings of Products
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The Progression of Economic Value
Stage Experiences
Relevant To
Differentiated
Deliver Services
NEEDS TO CUSTOMERS
COMPETITIVE POSITION
Make Goods
Extract Commodities
Undifferentiated
Irrelevant To
Premium
Market
PRICING
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Economic Distinctions

• ECONOMIC
• OFFERING
• Economy
• Economic Function
• Nature of Offering
• Key Attribute
• Method of Supply
• Seller
• Buyer
• Factors of Demand

COMMODITIES Agrarian Extract Fungible Natural
Stored in Bulk Trader Market Characteristics
GOODS Industrial Make Tangible Standardized In
ventories after Production Manufacturer User Feat
ures
SERVICES Service Deliver Intangible Customized
Delivered on Demand Provider Client Benefits
EXPERIENCES Experience Stage Memorable Persona
l Revealed over a Duration Stager Guest Sensation
s
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3) How we do it at EB GAMES
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Why Apply this to EB GAMES

• Differentiate against Competition
• Allows for Premium Pricing
• Appeal to Avid Gamers and aspirations of Casual
  Gamers
• Creating a Third Space increases visits and
  time in store SALES

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• How do you bring the Passion and Excitement of
  Playing Video Games into a Strip Mall?

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EB Games Creates Experiences

• Gaming Tournaments
• Interactive Gaming Units
• Launch Events/Autograph Signings
• Day 1 Releases
• EBTV
• GMR Magazine
• Loyalty Club
• Try any game in the store
• Local Community Events

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4) What Does This Mean For You
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Who is Doing it Well?

• Starbucks
• Disney World
• VEGAS
• Hard Rock/Planet Hollywood/Dive/ Rainforest Cafe
• NikeTown
• Cabelas
• Progressive Insurance
• Hertz Gold Service
• Commerce vs. ING

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Questions To Ask Yourself

• What if Starbucks/Disney entered my
  industrywhat would they do?
• Ask Consumers what would make them pay more for
  your product? What if you charged an entrance
  fee?
• How can your product be more fun, more personal
  and more memorable?
• How can we ENGAGE people? From an Emotional,
  Physical, Intellectual or even Spiritual level?

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KEY CONTACT

• PAUL KOULOGEORGE
• EB GAMES
• Vice-President of Marketing
• [phone] x7940
• Paul.Koulogeorge_at_ebgames.com

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