Thinking of Buying a Video Game Shop Business in Australia? Here Are 3 Vital Questions to Ask
The Australian video game retail industry has faced significant disruption due to digital downloads, game streaming services, and shifting consumer preferences.
In 2024, total industry revenue is projected to reach $988 million, with an annualised decline of 5.60% from 2008 to 2025.
Revenue is expected to continue decreasing at an annualised 2.93% through 2031, driven by digitalisation, online retail competition, and evolving gaming technology.
Despite declining sales of physical video games, niche opportunities exist in retro gaming, gaming accessories, collectibles, and experiential retailing.
Buyers must assess financial performance, market positioning, and operational strategies to ensure long-term success in this evolving market.
1. Is the Business Financially Viable?
Why It Matters:
Profitability in the video game shop industry depends on revenue diversification, premium product offerings, and community engagement.
Industry-wide profit margins stand at 3.40%, with businesses generating revenue from video game sales (69.8%), DVDs and Blu-rays (19%), recorded music (5%), and other products (6.2%).
Successful operators improve profitability by expanding into gaming accessories, retro titles, and experiential in-store events.
What to Check:
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Revenue sources: Does the business generate income beyond game sales, such as console repairs, gaming merchandise, or esports event hosting?
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Operating costs: How do inventory, rent, and staffing expenses compare to industry benchmarks (purchases account for 46.7% of revenue)?
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Customer retention and sales channels: Are there strong loyalty programs, membership-based perks, or online-exclusive deals?
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Profitability trends: Is the business maintaining or increasing its margins in line with the 3.40% industry average?
2. Does the Market Position & Retail Strategy Support Growth?
Why It Matters:
A video game shop’s success depends on its ability to differentiate from digital download platforms, big-box electronics stores, and online retailers.
Businesses that focus on gaming accessories, exclusive physical media, and in-store gaming experiences are better positioned for long-term sustainability.
What to Check:
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Target market fit: Does the business cater to high-demand segments such as esports gamers, retro game collectors, or competitive gaming communities?
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Competitive landscape: How does the business differentiate from online game retailers, direct-to-consumer platforms, and digital distribution services?
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Retail and digital strategy: Are there strong e-commerce capabilities, in-store gaming experiences, or exclusive product offerings?
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Scalability potential: Can the business expand through gaming lounges, limited-edition merchandise, or gaming influencer collaborations?
3. Is the Business Aligned with Industry Trends & Future Growth?
Why It Matters:
The video game shop industry is evolving, with increasing demand for gaming accessories, retro collectibles, and in-store gaming experiences.
Businesses that integrate experiential retailing, community engagement, and multi-channel sales strategies will remain competitive.
What to Check:
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Omnichannel retail integration: Does the business offer online purchasing, digital game codes, or exclusive in-store events?
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Service and product expansion: Are there opportunities to introduce gaming tournaments, subscription-based gaming lounges, or premium gaming setups?
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Compliance & regulatory alignment: Are all products compliant with Australian consumer protection laws, ACCC regulations, and gaming classification standards?
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Revenue diversification opportunities: Can the business expand into esports events, gaming merchandise, or exclusive physical media launches?
Ready to Invest in a Thriving Video Game Shop Business?
With increasing demand for gaming accessories, retro games, and interactive retail experiences, the video game shop industry presents significant growth opportunities.
Success depends on financial sustainability, competitive positioning, and alignment with emerging industry trends in gaming hardware, esports, and community-driven retail.
Prospective buyers should conduct thorough due diligence to ensure long-term profitability and operational adaptability.
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