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Thread Author: Supergrafx
Thread ID: 5334
Thread Info
There are 43 posts in this thread, and it has been viewed 5577 times.
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Rise and fall of a video game business in the 90's
merlin
Very interesting read. Thanks for sharing Supergrafx! Nice to hear that the Game Dude got what he deserved in the end.
 
Supergrafx
merlin wrote:

Very interesting read. Thanks for sharing Supergrafx! Nice to hear that the Game Dude got what he deserved in the end.


I am glad you're enjoying it merlin. To be honest, i carried a lot of guilt for ages after what happened to Game Dude given that i steered the Nintendo people his way. The whole thing ruined him financially. The case and outcome actually got a write up in one of the UK game mags at the time.
 
RiKo
Supergrafx wrote:

hitorkori wrote:

Great read I bought my superfamicom off Chinese guy out of the boot of a crx with super Mario world & act raiser some 8 months before pal realeaseSmile


It's almost like both Nintendo and Sega didn't give a rats ass about the pal regions in regards to consoles and games. This attitude they both had towards the pal markets opened the door for game and console importers to flourish. Shrug People in the pal regions wanted to play games just like people in Japan and the US, but to have to wait ages after consoles were released elsewhere to finally get an official pal release was such a slap in the face to European and Australian gamers. Angry


Great read Supergrafx. Looking forward to part 3.

Totally agree. Nintendo only had itself to blame for delay and inferior product it was releasing in PAL territories. Although on the flip-side I do remember Microsoft trying the first-ever global launch with the the first Xbox console but then failed to manufacture enough games/consoles per region. So it really did require a massive-operation. The length of delay between release in different regions on consoles in the 80s/90s was just ridiculous though!

Game Dude indeed sounds like an arse! If he had stuck to the deal you both would have made a lot more money and maybe not even have been taken out of business.

Very smart to import PAL games and stay under the radar Thumbs Up
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Supergrafx
You're absolutely right Riko, the difference between 50Hz pal to 60Hz ntsc was hugely noticeable. In Nintendo and Sega's defense the fact that pal region TV's were in fact 50Hz, they had to make their consoles to suit this. It wasn't that they thought we were all a bit slow.

Game Dude was one of these people who said one thing but did another. He shot himself in the foot quite a few times by getting into a pricing war with us. As we were usually bringing in 4 or 5 times the number of games that he was, the price we got games for was significantly lower than his. In the case of the Jap version of SF 2 he was buying his games from the same supplier in Hong Kong as us but bringing over only 500 copies as opposed to us bringing in 1000. We were getting the game at $20 less a copy than him because of the quantity price. End of the day with the price going down to $100 a copy he would have been lucky to have made $10 profit per copy where as we were making close to $30 a copy.

While it's great to have a monopoly on something, having some competition can be good too. As a business person it keeps you on your toes because you don't want to lose customers to your rivals and for a consumer it keeps the prices in check. While i was a businessman i was also a gamer as was my partner and we focused more on making profits from buying in large quantities as opposed to having a huge mark up on a game. You just have to be careful not to get stuck with a load of stock that you can't sell. Gaming magazines at the time as well as our network of customers would be essential tools for us to determine how popular a particular game will be and base our orders on that information.
We rarely had any stock left over after an order but any that we did would later go in the bargain bin at cost price and get moved on that way.

Game Dude was just a dumb f*ck with no real head for business and had no passion or interest in games apart from selling them.
Edited by Supergrafx on 25. November 2016 18:38
 
merlin
Perhaps I was a bit harsh but it's hard to feel much sympathy for the game dude. His reporting of you to Nintendo could have led to your financial ruin. Also it was treacherous to make the pricing agreement with you, accept your help with those adapters and then undercut you anyway!

Looking forward to the third installment!
 
Supergrafx
Okay as promised here is the third part in the rise and fall story.

WARNING !!!! Wall of text following :-

Our first shipment of PSX consoles arrived and it was my job to pick them up after they cleared customs. As i was arriving back to our shop i could see that there were people everywhere, the shop was full and there would have been an easy 200 or more people in the car park. I wondered what the f*ck was going on as i had only 125 consoles and these had already been pre sold....there were no extras for anyone who hadn't put down a deposit. I pulled up and no sooner had i got out of the van when i was immediately besieged by people thrusting wads of money in my face and demanding a PSX console. One guy in particular put a bundle of notes in my top pocket and proceeded to try and open the side door on the van to grab a console. Luckily, i had locked it after picking up the consoles. It quickly became apparent to me that there were a shitload of people here that hadn't ordered a console but were very keen to get a hold of one.

Gamers for the most part are a happy lot and you even get the real placid, pacifist type ones like merlin on this forum but deny them their gaming fix and they can turn into raging assholes in 2 seconds flat and this is what i was faced with in the car park. I thought, f*ck this shit, i'm out of here and after throwing the money back at the guy that stuffed it into my shirt pocket i got in the van and drove away. I did what most men do in times of crisis or confrontation, i headed to the nearest Pub and ordered a pint to calm my nerves. I called my partner at the shop to let him know where i was and said i wasn't coming back until the crowd had been sorted out. After several pints, a counter meal plus a long session on the Pub's pinball machines, it was safe to return to the shop.

Consoles and games were dispatched to all our pre order customers and things were quickly back to normal. My partner had taken orders and deposits for another 200+ consoles as well as over 100 phone calls from people who were coming to pay a deposit in the next day or two. It became clear that moving 500 PSX consoles wouldn't be a problem but we needed a better strategy in place to avoid a repeat of the events earlier in the day. The amazing thing was that we hadn't done any advertising so all this business was coming to us by word of mouth within the gaming community.

From now on we would try to make sure we had more consoles than had been ordered and ensure the stock was in the shop before calling people to say it had arrived. Future sales would go much smoother. All of the initial order of 500 consoles were now spoken for and we were still getting calls from people wanting one. Demand for the PlayStation was well beyond our initial expectations and we decided to ride this wave and ordered another 500 consoles as well as another 2000 games.

Everything was going well and we were making a killing with our console and 3 game package but every now and then life can throw you a curve ball and we copped one right on the chin. Anyone that was around when the PlayStation was released will probably remember that the first few batches of consoles were plagued with some 20 to 25% having faulty lasers. No sooner had we ordered the next lot of consoles, when we were getting people that purchased one from the first lot bringing them back due to the faulty laser issue. All up we had some 87 faulty consoles returned and we had no choice but to replace them with a new one. All of a sudden things were going a bit pear shaped and our profits were taking a big hit.

As the consoles came with a warranty i called our supplier in the UK to discuss the issue and try to come up with a satisfactory solution for both parties. Our supplier said we would have to pay for the faulty consoles to be shipped back to the UK whereby they would arrange for them to be repaired and we would also have to cough up the money to get them back to Australia. Not only would we have to cop two lots of freight on these faulty consoles, we would also have to sell them as second hand goods despite the fact they would have new lasers in them. Bollocks.

We had just received the first 125 consoles from the second lot of 500 and given the faulty laser issue were going to sell them and cancel the remainder of the order trying to cut our losses to a minimum. I called our UK supplier and told them we wanted to cancel the remainder of the order due to the large number of faulty consoles we were getting. The woman i spoke to at the time was much more sympathetic and understanding than the moll i had spoken to before. She said she would contact Sony UK, inform them of the problem and see if they would come to the party in regards to either fixing or replacing our faulty consoles.
She said she would be in contact with us within a few days. We weren't holding out any great hope of Sony UK coming to the rescue and were already talking about dropping console sales and focusing just on selling the games.

As promised, she called us back within a few days and said she had some really good news. Sony UK had agreed to replace all our faulty consoles with new ones as well as any future ones with the laser fault. All we had to do was send her pictures of the faulty consoles and a list of all the serial numbers. At some stage in the future Sony UK would issue our UK supplier with a purchase order paying the freight charges to have the faulty consoles sent back to the UK. She also added that if we reinstated the order for the remaining 375 consoles that she would add the new replacement consoles from Sony UK to the order and they would absorb the extra freight charges. The news just couldn't get any better.

Up until this point we had not been advertising that we were selling the PSX, it had all been word of mouth business through the gaming community so we placed an ad in the trading post newspaper we used before. The response was overwhelming with people from all the other major cities in Australia calling to buy a PSX. Our two girlfriends were brought on board to handle mail orders to other cities as we couldn't cope on our own. Despite us offering to pay the girlfriends for the work they were doing in generous amounts of alcohol followed by sexual favors this offer was rejected and cash payments were demanded by both of them.

We were soon into a third shipment of another 500 consoles and there was still no news on when Sony Australia were going to release the console here. The number of faulty consoles coming back was rising and we were up to nearly 200 of them. More of a pain in the ass than a big problem as true to their word, Sony UK were replacing them. What came as a surprise was the fact that they replaced the faulty ones with boxed consoles that were complete instead of sending just a loose console.

Demand for the PSX eventually waned as we had pretty much saturated the market here in our home city but games were flying of the shelf. After our fourth shipment of 500 consoles, we decided to pull the plug on bringing any more consoles in from the UK and focused just on the games. The Nintendo 64 had just been released in the US and we imported small quantities of consoles and games for some of our well known customers. Given the earlier dramas that had happened with Nintendo, we weren't going to again put ourselves in the firing line by importing and openly selling the US Nintendo 64 console or games. Despite getting lots of calls from people wanting to buy a N64 console, unless they were someone we knew and trusted the answer would be no.

Another issue that would cause us some problems was the lack of age specific ratings on games. While Nintendo, Sega and Sony in the US were putting age ratings on their games, the UK and Australia weren't. This problem would be one of the factors later in our decision to quit the video game business.

We were then approached by the guy i mentioned in Part 1 of this thread. Back when i first did business with him he was the head man for a chain of 15 video libraries. This had now grown to 20 stores in our city and he had also become part of a larger Australia wide consortium that consisted of 110 video stores spread through all the major cities. We had sold his son and some of his son's friends PSX's and he wanted us to kit out not only his 20 stores but the rest of the consortium's stores with PlayStation consoles and games. The plan was to put between 4 and 6 consoles as well as 30 to 40 games in each of the groups 110 stores for them to rent out. Our initial reaction was to say thanks but no thanks as we both felt that having import consoles and games in video stores around Australia would inevitably be noticed by someone from Sony Australia and the trail would lead back to us.

While he was disappointed at our decision he asked us to give it some more thought and he would be in touch. He called us later that afternoon to tell us that the head guy of the consortium would be flying in from Melbourne that night and would we be willing to have a meeting with the both of them over lunch the next day. While our stance on the offer was still a firm "no", the lure of a free lunch at a swanky downtown restaurant was too good to turn down so we went to the meeting.

After we had eaten he began talking about the video business and that the Blockbuster video group from the US were trying to establish themselves here in Australia. What Blockbuster would do was rent or buy a building near an established video store, then start a price war with the aim of either putting the established store out of business or taking a large chunk of their customers. This was already happening to some of the consortium's larger stores in Melbourne and Sydney.

I said," this all sounds very intriguing but what does it have to do with you wanting us to kit out your stores with PlayStations"? He went on to say that Blockbuster weren't renting games and consoles so this was an area that the consortium felt it would be able to regain some ground on their rivals. Having a good video game rental section in a store will bring the kids and the kids will bring their parents. We want you two guys to come on board with your knowledge of video games and revamp all of the stores with new professional looking game sections. We also feel that by having these PlayStation consoles and games for rent we will have a distinct advantage over the competition.

Our response was that while we would be happy to come on board for an agreed fee to set up new game sections in the video libraries, under no circumstances would we be bringing in more PlayStation consoles to put into a rental situation that may lead to Sony Australia taking legal action against us. I told him what had happened to Game Dude when Nintendo made an example of him and he understood our concerns.

We then suggested putting them in contact with our UK supplier so they could bring the consoles and games in themselves but they weren't keen on doing that. "We know three fifths of f*ckall about video games which is why we want you two on board, you guys know what games will rent well and what won't etc...so and so here tells me you are the resident game gurus in this city" he said. Having your ego receive a bit of a stroke during business negotiations usually tends to make you less resistant than you normally would be and the tactic worked here. We both went outside and deliberated the pro's and con's of doing the PlayStation deal.

On the plus side was the opportunity to make some good profits as well as assist the consortium to fight the good fight against the evil Blockbuster empire. On the negative side of course was leaving ourselves open to ending up like our arch nemesis Game Dude. We came up with a set of terms and conditions that we felt they would be unable to meet and that would be the end of it.

Returning to the table he asked us what we had come up with. I said that we wanted an upfront cash payment of $25,000 each to get on board and make arrangements to import the number of consoles and games they wanted. At this point we expected the negotiations to end but he simply looked at me and said "no problem, what else do you guys want?". We both looked at each other a bit stunned by this so i hit him with some more conditions. "We will bring the consoles and games in, put them in separate lots for each of the individual stores that want them and you will collect these lots from us for you to then distribute to the stores yourself". "Secondly there will be only one invoice issued by us with a very vague description of the goods being sold and this must be paid by bank cheque made out to cash within 7 days, it is up to you guys to invoice your individual stores for the goods". "When you invoice your stores there must be no mention of Game Lords, Sony or PlayStation, the invoice should just have video games written on it".

From our side we will create a kick ass template for a game section that you can implement in all your stores. Source and provide game related promotional material such as banners and posters. Print a weekly newsletter that gives information on upcoming game releases and whether we think a particular game is good or bad, for you to distribute to all your stores. Supply Nintendo and Sega consoles/games at cost plus 10%. The PlayStations and games will be supplied to the group at a 10% discount to what we normally sell them for.
We will both dedicate one day a week from our game business to do the newsletter and other consortium game related business for which you will pay us for our time. Advice and technical support will be available for any of the consortium's stores that are buying from us anytime. We ask that should we strike a deal today that you no longer refer to us as Game Lords to any of your stores or people but simply call us the Two Daves.

All of our conditions were accepted and a deal/business arrangement was agreed to. We would order another 500 Playstations and 3500 games that night.
................................................

I have just realized how long winded Part 3 has become so i will stop it here and make Part 4 the final post. While i am not deliberately trying to create a cliffhanger, part 4 will have the details of our meeting with the Sony people and our exit from the video game business.
 
Supergrafx
merlin wrote:

Perhaps I was a bit harsh but it's hard to feel much sympathy for the game dude. His reporting of you to Nintendo could have led to your financial ruin. Also it was treacherous to make the pricing agreement with you, accept your help with those adapters and then undercut you anyway!

Looking forward to the third installment!


You're right merlin, it definitely could have been us that Nintendo shafted and every time i felt guilty about what happened that's what i would tell myself. Having a conversation with one of the Nintendo people sometime after the case, it was never their intention for the case to even get to court. Had Game Dude not chosen to fight the case in court he would have most likely copped a $10,000 fine and minimal legal costs. When he made the choice to fight the case, Nintendo decided to make an example of him.
 
RiKo
Very interesting again reading more of your games-selling history supergrafx. Was sad to see the end of The Game Lords though!

Crazy scenes with the rabid Playstation buyers. Sony definitely did something right when marketing the Playstation - quite amazing for their first console. I suppose it was a massive step up from the SNES/Megadrive era in terms of tech.

I remember as well as the laser fault there was a gfx glitching issue with the first Playstation GPU. But it wasn't a major problem and wasn't noticeable on most games.

I can understand you were reluctant to bring import consoles and games into the country after what happened with Game Dude. I would have been wary too. Very sensible to take precautions.
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green beret
Great third part, thanks. Please bring the final part!
 
Supergrafx
RiKo wrote:

Very interesting again reading more of your games-selling history supergrafx. Was sad to see the end of The Game Lords though!

Crazy scenes with the rabid Playstation buyers. Sony definitely did something right when marketing the Playstation - quite amazing for their first console. I suppose it was a massive step up from the SNES/Megadrive era in terms of tech.

I remember as well as the laser fault there was a gfx glitching issue with the first Playstation GPU. But it wasn't a major problem and wasn't noticeable on most games.

I can understand you were reluctant to bring import consoles and games into the country after what happened with Game Dude. I would have been wary too. Very sensible to take precautions.


Glad you guys are finding it interesting. Due to the posts getting very long i have left out some things that are not that relevant. We did have several more run ins with Game Dude, some of which were so dumb they had us scratching our heads and saying WTF.

Game Lords wasn't at the finish line just yet, it was still our registered business name. We were just making sure that things couldn't lead back to us through the video library deal hence us wanting to be known as the Two Daves.

Bringing import consoles in for private customers was fairly safe, but bringing them in and putting them on show in public via the video libraries was very risky.
 
merlin
Enjoyed reading it SGFX!
 
Supergrafx
merlin wrote:

Enjoyed reading it SGFX!


Great to hear merlin, i will pm you details where you can send money for the privilege of getting a mention in part 3. Thumbs Up
 
merlin
LOL
 
RiKo
Supergrafx wrote:

Glad you guys are finding it interesting. Due to the posts getting very long i have left out some things that are not that relevant. We did have several more run ins with Game Dude, some of which were so dumb they had us scratching our heads and saying WTF.
.


I'd like to hear these stories. Sounds like Game Dude went rogue!
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STE C
Very interesting & a great idea you clearly have a talent for business possibly explains why you are so wealthy lol but seriously a bloody good read.
 
Supergrafx
STE C wrote:

Very interesting & a great idea you clearly have a talent for business possibly explains why you are so wealthy lol but seriously a bloody good read.


I'm glad you are enjoying it too STE C. I won't deny the fact that for a nearly 5 year period we did very well out of the business, we both walked away mortgage free on our homes. At that stage in life it was a huge leg up for us. The best thing though was that we were doing something the both of us had a passion for which was video games. That we were able to turn it into a profit making business was a bonus. My partner had the better head for business than me and we just had a very good couple of periods where things fell into place as well as a bit of luck.
 
Supergrafx
As promised, here is the fourth and final post in the rise and fall saga :-

WARNING!!!! Wall of text below.

No sooner had we placed the order for another lot of PlayStation consoles and games than we received a fax from the supplier in the UK stating that they were clearing all their Sega Saturn stock and were we interested in buying any consoles/games. If we purchased 200 Saturn consoles and 1500 games the price was well below what we were paying for PlayStations and games. The Saturn consoles were $100 less each than a PSX console and the games were half the price of PlayStation games which was an amazing deal. As we now had the consortium video libraries as customers, we could off load the Saturns and games to them so we took the deal. The pal Nintendo 64 had been released here and in Europe but had sold out here very quickly with new supplies of consoles some 4 to 6 weeks away. After much deliberation between the two of us, it was decided to bring in 100 N64 consoles and 500 games from the UK. As both the UK and Australia were putting age specific ratings on video games now, we would have to put Australian rating stickers over the UK ratings symbols as while the ratings were the same, the symbols looked different. As long as our UK import games looked the same as the Australian ones, nobody would be any the wiser as to the games being pal imports.

Before he left to return to Melbourne, the head consortium guy made a request for one of us to go to Melbourne at their expense in the coming week and meet with some of the group. The job of going to Melbourne would fall on my shoulders as my partner declared that i was the better public relations person. The day after my arrival in Melbourne i was taken on a tour of around 15 video libraries. While most of the stores weren't in direct competition with Blockbuster yet, there were three that had lost a significant amount of business due to Blockbuster setting up close to them. As i mentioned in part 3 this was a tactic that Blockbuster used in the US to great effect, which in my eyes was practically stealing business from people that for the most part would have spent years building up their client base. McDonalds uses the same tactic against it's rival Burger King. While some would view this as a smart business move, i saw it as somewhat ethically wrong.

Meeting with the people that owned the three stores most affected by Blockbuster moving into their area was somewhat interesting to say the least. Two of the stores actually had small video game sections that ranged from piss poor to outright pathetic. From memory their game sections consisted of a handful of SNES and Mega Drive games that were hidden over in the kids video section. The third store had no games at all in it and despite having already lost 45% of his business to Blockbuster, the owner thought that the consortium would be wiser to spend money on marketing/advertising than "stupid kids video games". I immediately crossed his name off my Christmas card list. Sometime later his views would change drastically. Back to the other two stores, one that had lost nearly 50% of his business to Blockbuster was a lot more positive and enthusiastic about going full on into video game and console rental. His business was at a point where it needed an injection of something new to get the customers back. Hopefully we would be able to give him that.

The final store would turn out to be a real challenge as they had lost a whopping 75% of their business to a Blockbuster store that had moved in directly across the road from them.
My personal feelings were that once you've lost that amount of business, nothing short of an injection of major capitol into the business will save it. The couple that owned this store had extended themselves financially 18 months earlier in moving their small video library into the bigger one it was now. They were also locked into a 5 year lease that still had 3 and a half years to run. Capitol of any kind was something they didn't have at this point. Looking at the Blockbuster store across the road, it looked way more inviting to people than their store. It had a really nice exterior paint job as well as fancy strip lighting in the windows that made you want to go see what was inside. My honest opinion was that without a major face lift both inside and outside that this store would not be able to compete with Blockbuster on any level. They were probably better off to cut their losses by selling all their stock and negotiating an exit from the lease.

Having a frank discussion with the consortium head later that day, he felt that while the store was indeed in serious trouble a message needed to be sent to Blockbuster that the group wouldn't just roll over for them. The couple that owned the store were long time personal friends of his as well. The group would put in the money to have the shop painted inside and out as well as some new carpet and window lighting on a par with the Blockbuster store. He went on to say that he wanted us to make this store's game section the template that all the other stores would use if they chose to go into console and game rental. We met with the store's owners the next morning and plans were put in place to revamp the entire store inside and out with one wall of the shop interior dedicated to video games.

I called my partner back home to discuss what was being planned for this particular video store and while we both had doubts about the store being able to rise from the dead so to speak, we would give it our best shot. The first part of our order from the UK had arrived which included not only PlayStations but N64's and Sega Saturns. Six PlayStations, six N64's, four Sega Saturns, three Neo Geo's and one 3DO console plus a very good selection of games for all of them were then sent to me in Melbourne to put in the store. I would use our accounts with Sega and Nintendo to source Mega Drive and SNES consoles and games for the store also. The store would now be almost totally closed to business for five days while all the revamping took place. I suggested a name change to "Video and Game Superstore" from the old name and this was written in fluoro strip lighting on the front fascia of the store. The windows now had strip lighting similar to the Blockbuster store and the inside looked a million dollars with new carpet/paint.

The new game section looked stunning complete with a big screen TV set up above the game shelves showing clips of lots of different games. A letterbox pamphlet drop was organised and at my request went 5 kilometers beyond the usual radius a pamphlet drop would cover. The pamphlet itself would be predominately about the new games section at the store but would also include some good game and new release movie package deals. The store would re-open fully on a Friday and i would work in the store that night plus the following weekend.
The response we got from the pamphlet drop was just incredible, the store was packed with people from 5pm to 9pm and extra staff had to be brought in to help us cope. By the end of the night, apart from a single SNES and two Mega Drive consoles there were no consoles left to hire out. Very few games and new release movies were available to hire as well.

To cut a long story a bit shorter, the store would not only regain it's lost business but it would increase it a further 70% due to the income from console and game hire. The Blockbuster store from across the road would relocate to another area soon after. All in all a very satisfying end result for both us and the store owners. We would get similar results with the other two stores as well.

Over the next few weeks we would offload all the consoles and games we had brought in from the UK to whatever consortium stores had ordered them. The news from Sony was that the Australian release of the PlayStation was imminent which was good news for us as it's release would stop us worrying about having sold import consoles to the video libraries.
We arrived at our shop one morning to find two guys in business suits waiting for us to open the store. They announced that they were from Sony Australia and they wanted to invite us to a gathering of retailers to announce the release of the PlayStation in Australia. As soon as they said the word Sony, i could feel the color drain from my body and my sphincter muscle tighten right up. My partner was experiencing the same feelings as i was.

When they said that it was an invitation in regards to the PlayStation release our apprehension eased somewhat but just before they left one of them said there was another matter they wanted to talk to us about and it would be in our best interests to attend the planned gathering at Sony the following day. Speculation and panic were our companions for the rest of that day and night wondering what this other matter was they wanted to speak with us about. While we were worried about it to the point of getting fist sized knots in our stomachs, we were pretty confident that the measures we had taken to prevent anything being traced back to us were solid.

We rocked up to the meeting in suits and carrying our mobile phone bricks(which we both thought were pretty cool) then proceeded to mingle with some of the retail managers from Woolworths and Toyworld. The two guys we met back at the shop gave us a stack of paperwork to fill out that would enable us to establish an account with Sony. They then ushered us into a private office for a sit down chat. We were asked straight out whether we had been importing PlayStations and games into Australia. We both strenuously denied the accusation and asked where they had gotten this information. They then proceeded to play a game of "good cop/bad cop" with one talking to us normally while the other kept firing questions and accusations at us.

This went on for a good 15 minutes but we stuck to our stories and kept denying all the accusations. After a somewhat heated verbal exchange between my partner and the one playing the bad cop role he slammed his fists down on the desk in front of me and said, "we know that you two f*ckers have been bringing in PlayStations and selling them to some video store in the Northern suburbs, you think you're smart but you're just a pair of dumb f*cks". I looked at my partner and he had also picked up on the fact that they were talking about a single video store which meant that they were unaware of the fact that there were many more stores that had PlayStations in them courtesy of us. I asked what video store they were talking about (sure enough it was one we had sold consoles to indirectly) and denied even knowing where the store was.

The other guy started quoting the parallel import laws to us and his partner responded by telling us that they would bury us in so much legal shit that we would need a straw to breathe. Pretty frightening stuff but we kept our cool and i simply asked "what evidence do you have that it was us that sold this video store these PlayStations?"." You can make all the accusations that you want but unless you have some proof that it was us that sold the store these consoles you can both go f*ck yourselves" and we both got up to leave. At this point a third man entered the office and asked us to hear him out. He said that Sony would be taking a very tough stance against having their consoles and games rented out by video stores (Nintendo had tried a similar stance back in the early SNES days and had failed). He went on to say that the video store in question had been asked to remove the PlayStation consoles/games from their shelves to which they complied. After some investigative work on their part they had come to the conclusion that we were the most likely source that supplied the store with the consoles and games. Admittedly they had no solid proof that we were the culprits but they wanted to take steps to prevent it happening in the future. He then gave us a legal document that they were wanting us to sign which was basically a "cease and desist" request from Sony. We had also noted that on the paperwork they gave us to fill out in order to have a trading account with Sony, that you would agree to not sell any consoles/games to any video store. Failure to comply with this request would result in the immediate cancellation of your account with Sony as well as possible legal action.

At this point we requested to leave the meeting and have a Lawyer that specialized in these sort of legal documents look them over before we signed them. They gave us 48 hours to return the documents back to them either signed or unsigned, but let it be known that should we return them unsigned there would be ramifications. As soon as we left the meeting we made a call to the consortium head and asked him to get all the stores that had PlayStation consoles and games for rent to remove them from the shelves for the time being. We said we would contact him later to discuss going forward in regards to the issue with Sony and the renting of their consoles and games but at this point in time it was vitally important that the stores remove any Sony consoles/games from the shelves.

Meeting with a Lawyer that afternoon we explained the situation to him fully along with the fact that our undies were constantly changing color due to the stress and worry of what may be coming our way. After looking over the documents he said that should we sign them, we would have nothing to worry about in regards to any importing of Sony products prior to these documents being signed. The wording of the documents was such that we would be forgiven for any past transgressions as long as we ceased and desisted from doing it in the future. Essentially you have been given a "get out of jail free" card by Sony. To say that we were relieved would be a massive understatement and we couldn't sign the documents quick enough. They were returned to Sony very soon after and we were rewarded by them fast tracking us for a Sony account. A day that had started out very badly was now just blue skies and sunshine.

As the official release of the PlayStation here was just a few days away, we contacted the consortium people and advised that they keep all Sony stuff off their shelves until the day after it's release. Sony couldn't legally stop them from renting out their consoles and games after that.

Having had another lucky escape from being prosecuted for parallel importing it was decided that Game Lords had run it's race and now would be a good time to call it a day on the business. Another factor in the decision was that all video games had to now have a copy submitted to the Australian Film Censorship Board which would then give the game what they deemed an appropriate age rating. The board would then issue you with special ratings stickers to put on the games. These stickers would have the games age rating as well as the official coat of arms decal on them so we couldn't just put the normal ratings stickers on as we had done in the past. Anybody caught selling video games without the official ratings stickers left themselves open to cop a fine ranging from $10,000 up to $50,000. Getting a particular game rated by the Censorship Board was not only time consuming it was costly as well, unless you were bringing in 5000 or more copies of a game it just wasn't worth the effort. This would mean we could no longer import pal copies of games from the UK and disguise them as Australian releases using the standard rating stickers.

We still had another three months to run on our deal with the video libraries so we set the end date of the contract as our business exit day. The first thing we needed to do was get the faulty PlayStation consoles(now up to 340 units) back to our supplier in the UK who would return them to Sony UK as per the arrangement made earlier. Our supplier said they would contact Sony UK to arrange a purchase order for the freight costs. Sony UK decided that it would be cost prohibitive for the consoles to be sent back to the UK and told our supplier that we should just turf the faulty consoles into the garbage.

Sony here were having their own issues with faulty consoles and had employed the services of two electronic repair places to fix the faulty units. Feeling that throwing 340 consoles in the garbage was a huge waste, i decided to take a faulty console to one of these repair places and get a cost to repair it. If it turned out that they could be repaired at a reasonable price we would look at getting the entire 340 fixed and sold as second hand units. Sony UK had replaced all of the faulty units we had so in effect they had cost us nothing. I walked into one of the repair places holding one of the faulty consoles and the guy behind the counter took it from me, went out the back then returned with a brand spanking new console and gave it to me.

Being a bit surprised by this i then asked the question as to why they were giving out new exchange consoles instead of repairing the faulty ones. To answer my question, he took me out the back and showed me a stack of what must have been 100+ faulty consoles. He said that initially they had been repairing the faulty ones but a shortage of new lasers along with the large amount of faulty consoles coming in, that for the time being Sony were replacing the bad ones with new units. All you had to do was bring your faulty console in and get it swapped out for a new one.

We then hatched a plan to take advantage of Sony's generosity, and set about getting everyone we knew to take in one of our faulty consoles and get it exchanged for a brand new one. It took about 4 days but we now had 340 brand new PlayStation consoles that hadn't cost us anything. These were then put back in the boxes of the original ones we had replaced along with an extra controller that had come with the UK replacement ones, then offered to the consortium video stores at $100 less than their usual buy price.
They were all sold within a few days and it would be our last hurrah before handing over the business to one of our long term customers. He would carry the business on with his wife for another five years before calling it a day himself. Both me and my partner would buy our games and consoles from him right up until he finally closed the doors.

.....................................................................
Edited by Supergrafx on 08. December 2016 05:10
 
green beret
So good story....!
 
Supergrafx
green beret wrote:

So good story....!


Thanks, i hope you enjoyed it.
 
RiKo
Very interesting read Supergrafx, thanks for taking so much time to share your stories with us. Impressed you got some Neo Geos from the UK. They were rare enough here at the time. Also interesting that the revamped store you helped with was so good that it forced Blockbuster to move on!
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