There has been a lot of talk about gaming here on rAVe lately.  It started with Matt Cooper’s blog Gamers: An Untapped Market for AV Integrators in which he shared a bunch of stats from the ESA.  Then, Gary followed up on that article with a Rants and Raves audio diatribe entitled “Can Gaming Save the HomeAV Market?” where he connected the dots between Matt’s data points and some new and emerging technologies out in the market.

After reading Matt’s article, I was tempted to comment, but refrained, and then when I heard the Rants and Raves piece I had to jump in.

The figures Matt threw out were great and rounded out with the size of the addressable market, $20.77 billion dollars.  At about that point, I heard the voice of Kevin O’Leary from Shark Tank, “That’s all great, but how do I MAKE MONEY?”

Matt threw out the right buzz words.

Service Contracts!  Experience!  User Interface (UI).

However there really wasnt any hint as to what integrators would service or why it would be of value/in demand with clients who already own similar systems and have done just fine without them.  Sure, we could be up to date on new games and controllers as he states and maybe guide the customer to a new system.  Perhaps it would be enough to be able to show them that PS4 has a mobile app for control, or allows PS Vita to play many of the titles stored on the PS4 over the local WiFi network, but what is the revenue stream there really?

There is no real custom reseller channel for these types of game systems, accessories, and games.  There is no margin in the hardware in that scenario, so the opportunity to make a profit has to be in the additional value we bring to the system.  What is that?  Even Best Buy is losing money trying to move “boxes”, so we have to be selling expertise.

Gary made a point to talk about 2 things specifically.  Those being Second Screen and MultiViewTVs (where two users wearing different glasses see two different images on the same TV set).

At best, Second Screens allow integrators to sell extra WiFi gear or Docking Stations.  I agree there is some market for that although it has not been as big as one may have expected.  Gaming Systems like PS4 and XBox have not been that viable in the past as whole home media server devices, despite their streaming and storage capabilities, because even though you could distribute the AV content, control was all done via a tethered, IR, or Bluetooth controller that was hard to extend to other areas of the home to facilitate control.  They had to be within a fixed distance of the console itself to work reliably.  Now with Second Screen options like that on the PS4, a WiFi tablet can control the console, making it a better device for AV integration, at least as a media server, but still not as a distributed gaming system as the Kinect Sensor/Dual Schock Controller/etc all still need proximity to the console.

On the MultiView screen technology, there is one major issue with the argument Gary made for two gamers playing simultaneously without having to split the screen.  Game Systems like XBox One and PS4 only have one video output.  XBox One will let you view two things simultaneously (like TV and Skype) but only on a single screen.  MultiView allows two viewers to view two different inputs simultaneously through the glasses, so you’d have to have 2 XBox Ones in the same place, feeding two different inputs on the TV, and then connected for multiplayer over the internet in order to do what Gary suggests. . .

Now if we were talking about a PC based gaming center with a dual output graphics card, we’d have a better argument for MultiView, so to be fair, if that was Gary’s suggestion, maybe. . .

On that avenue, the better promise for AV Integrators for upgraded systems and design is in PC based gaming.  Projection mapping software has come along way, and opened the door for many integrators to offer that type of system.

A room with three projectors, edge blended and warped around the corners in a game room, could provide an extended desktop for a multi output PC that allows a gamer to have their left, forward, and right views from a racing game, flight simulator, etc, all up and active simultaneously, giving an immersive visual experience.  Add some DBox chairs, and you may have something close to Star Tours in your basement game room.  Now that is a service that an integrator could sell. . .or is it?

The final part of my argument against gaming as the savior for profit in the home AV market is the demopgrapic itself.

Let me go back in time quickly.  I used to sell home AV systems.  I was at a company that did 2000 homes a year at peak in 2006/2007.  I did an estimated 2000 low voltage consulations myself in 5 years there.  That’s a lot of folks to meet, and there were some definite trends.

One major one is that those under 40 prewired for things a huge portion of the time as opposed to buying the equipment and hardware (despite their ability to wrap it in the mortgage and not pay out of pocket later).  Many of thes actually asked me if the super would let them run their own wire in the house, to eliminate the $250 prewire cost for Home Theater or the $110 cost to wire the patio speakers.  The DIY attitude was RAMPANT in this demographic.  Many of these folks had money as they were buying $800,000 homes, but they still asked to run their own cabling and bought prewires a large percentage of the time.

It was surprising to me at the time, (not now), that my BEST sales, in terms of AV dollars in relation to the home price, were from my “active adults: or 55+ clients.  In fact, one of my best communities was an “Over 55” retirment neighborhood, mostly of second homes for these clients.  These folks had disposable income, but they also had something else.  The appreciation for the value of their own time and efforts.  It was worth the money for them to have everything done at one time, by one company, as they didn’t want to spend their time later doing everything.  They overwhelmingly bought midline, quality products, (not entry level) and they always wanted end to end service, installation and support.

My point is that with the average game purchaser being 35 years old, they are in my experience going to be the most reluctant to hire anyone to assemble their systems or pay a premium for an integrator to do things they would do themselves.  They would be the most likely to take your ideas, your proposal, and then shop it on Amazon, have you run the cables, and then cut you the integrator out altogether.

As with any generalization, there will be exceptions, so gaming not a bad option to offer as an integrator, I just wouldn’t bet the farm on gaming any time soon as the category to solve your woes if you have been having trouble adapting to the low product margin, service oriented profit model that is the most viable for integrators today.

So, What say you?  Tell me I’m right or pick a fight (you won’t win 🙂 ) in the comments below!