fbp
177: D&H on How Gaming Has Grown Up

Written by Rob Stott

July 25, 2023

The video game industry carries a certain connotation that often leads to independent retailers turning a blind eye to the category. But, as Chad Bowser of D&H points out, the video game segment has matured well beyond the average age of its consumer. And it’s a category that represents a major opportunity to the dealers who go about it the right way.

Link to CE Pro article referenced in the interview.

Link to AARP study referenced in the interview.


 

Rob Stott: All right. We are back on the Independent Thinking Podcast and joined this week by our friends out in D&H, which I did another podcast with the folks from NKBA and they’re in Bethlehem, PA. I’m sitting here in Philly. You guys are out in Hershey, so not too far from the area where I’m sitting here, Hershey, Harrisburg area. I’m out here in Philly. So nice to get these southeastern-ish PA folks on the podcast. Mr. Chad Bowser joining us today from D&H Vendor Business Manager. And if you’re reading the headlines, we’re going to be diving into gaming, so a gaming consultant there at D&H as well. A guy who spent plenty of time in their gaming world and helping out with that initiative and joining us today to talk a little bit about that. So Chad, appreciate you jumping on and having the availability.

Chad Bowser: Hey, no problem. I’m pretty excited about this, and I thank you for reaching out to us. Yes, we are from the sweetest place on earth and we work for some of the sweetest bosses, we can have them too.

Rob Stott: Oh no, those Schwabs are, they’re a good bunch. I’ve been able to interact with them and I know they are a powerful duo there, doing some really awesome things with you guys. So I want to start, before we even dive into the meat of this thing, obviously we’re going to be talking about gaming. We’re just going to get the elephant in the room out of the way. I mean, last name Bowser. I’m sitting here in a Nintendo shirt. I did it purposefully, of course. So tell me, was this a path, a career path destined for you from day one?

Chad Bowser: It was manifest destiny, I guess. Higher powers were at work somewhere. Call it what you will, but I guess I was born into this. It started in 72 when I was born, but there were many footsteps along this journey and just having the last name sealed the deal. I don’t know, maybe that’s why they gave me the job because, “Hey, Bowser. Isn’t that a gaming related?” I would hope it has something to do with my knowledge and the skills I bring, but we’ll default to my last name. I’m not alone in this though. There is another Bowser, not just a guy in Nintendo, but there’s a Bowser that runs all of Nintendo of America, and we actually met each other. We called ourselves… He was Bowser and I was Bowser Junior, so…

Rob Stott: It’s incredible. And well, people that know the games know that Bowser’s the villain. So I hope you guys didn’t lean into that side or maybe you did. I don’t know. Was that the thing?

Chad Bowser: I don’t know. But Jack Black has made my life a little bit worse in the last couple of years.

Rob Stott: No, that’s great. That’s awesome. Well, I appreciate you having a little bit of fun there. And you shared a little bit of it, but tell us for those listening a little bit about yourself and your background and path to D&H.

Chad Bowser: So, I’ve been at D&H going on 12 years now, and it feels like a blink of an eye, but it’s also been a great journey. I came on, recruited into D&H. I originally was at Best Buy, and my last job at Best Buy was I was the coordinator for gaming in the Philadelphia district, working together to grow that initiative. But a great opportunity came across to work for D&H. I talked to people and the people at Best Buy spoke very highly of the company. I was brought in for a short period of time. I did a stint as the HP Business Development manager. The opportunity popped up about doing gaming for D&H, and I just jumped both feet in and has been going nine, ten years doing gaming, growing gaming, watching it evolve. The cool thing about gaming is the technology evolves faster than any other technology out there. It’s always doubling year over year. And in nine years when you start and you think where we’re at today, it’s mind-blowing.

Rob Stott: Yeah. I mean, a lot has changing and it’s kind of interesting too, and it leads right into what I was going to ask next and a lot, there’s so many elements to the gaming industry. So there’s console gaming with people think of the PlayStations and Boxes and switches and Nintendo, and of course there’s the PC side of things and very powerful systems that can be built and customized. And I mean, you see the gaming leagues and how they’ve popped up around the world. And then I mean, down to the devices in our pockets and the smartphone gaming. So how can you simply define this category in any way? Or if someone asked you to define gaming, how would you do it?

Chad Bowser: Entertainment, it’s how we pass our time.

Rob Stott: Yeah.

Chad Bowser: There was a really good phrase is that societies are judged by how they entertain themselves. Well, our society entertains ourselves by gaming in all different fashions and forms. It’s how we get by. It’s how we release stress, it’s how we connect and entertain. It’s how we hold on to our former glories of the days of high school when we were all great athletes in our minds and we try and replicate that. Or great athletes, race car drivers, whatever. It’s how we let go of what our day brings and stay connected physically and digitally.

Rob Stott: No, I love that. And I kind of taking that and from a slightly different perspective for the retailer listening, there’s a lot more to it. We talk, again, about the consoles and the software and the smartphones themselves too, but when you think about the gaming category, obviously it’s a lot broader than just that. So talk about some of the things that… I know you mentioned the being involved in the growth of the initiative at D&H. And I think I saw in a previous life, having attended some of your shows out there at the Hershey Convention Center and that gaming, the eSports pavilion that popped up and stuff like that. I know you’re the guy behind it. So got to see that kind of come to life. It made clear that gaming is about more than those systems and the software. So talk about some of the other aspects of what you might see on a retail floor that constitutes gaming.

Chad Bowser: So, gaming, and it’s funny you say retail, gaming is actually, it can split it. It has evolved. It’s also, we call it consumer and commercial. And when you say gaming, that usually infers consumer. That is an individual in their house playing games, maybe not competitively. And then there’s what has become eSports. And eSports is competitive game. It is colleges, it is teams, that it is entities playing for big money, branded teams, branding. That’s where the commercial one, all the branding that comes in. So there’s two aspects to it, but the retailer, they customize and they tailor to the individual, the gamer, that may one day if they’re young, want to become that eSports person, hopes and dreams that we all have aspirations.

And then commercially, there’s partners out there that build whole studios. D&H has actually worked with a partner in downtown Harrisburg to build an eSports lab. A great group of guys called Harrisburg Storm. Not long after we helped them build that, they turned around and won the eSports collegiate championship. They were on ESPN and everything. It was really cool. Unfortunately because ESPN said, “Hey, you can’t have any logos on there,” so they had to take off the D&H brand, but it was really cool to see those kids go out there and when we’re like, “Hey, we were part of that.” And there’s a lot of people that are a part of that.

And also along with gaming, you nailed it, there’s a certain… It’s experience. Gaming’s experience doesn’t just stop with the controller or the mouse in your hand. There is the ambiance around the lighting. You go into your gaming room. I am a nerd by trade and a nerd by life, and I was influenced by the Tron movie and I always wanted to crossover to the grid. I want to go into a room where I have the Tron experience lights come on and everything, and that’s part of the gaming ambiance. And then there’s the next step is you game and then you stream your game. And you go online and you show people and you learn from the community or you just have an opinion. Gamers are opinionated, and everyone wants to put their opinion out there. And that’s part of it. Twitch streaming, YouTube. There’s all different things that a lot of people do.

Rob Stott: Yeah. And I mean, needless to say, the opportunities for the retailer in this extend beyond the console and the controller. You mentioned the lighting and the ambiance around. I’m sitting here, if you’re watching a video, obviously you got a background set up and the headphones and everything involved. There’s microphones for streaming. I’ve got LED strip lighting around the desk here. I’m trying to show off a little bit, but it’s hard with the windows because it’s not nighttime, so you can’t really see it, but I see it. It’s setting up that environment for you, the desk chairs, the standing desks, all the gaming desks that exist out there. And so just-

Chad Bowser: The monitors.

Rob Stott: Yeah.

Chad Bowser: The speakers. Not everyone wants to put a headphone on the speaker quality. It’s a full experience that you have to put yourself. The chair you sit on. I’m sitting on a very nice gaming chair. You can’t see it, but it’s not a console and a controller anymore. It’s not a Sega, we’ll say Sega.

Rob Stott: It’s that full immersive experience. And you mentioned the role you kind of played in growing gaming at D&H. And I know since you’ve been there, a major emphasis for the company. So why, and maybe it might be cool too to hear your perspective because I’m sure you definitely did play a big role in it. The importance that’s been placed on the category. Why is there such a great importance and what was the pitch? If they weren’t already feeling that way, was there a pitch you had to make for putting more emphasis on gaming?

Chad Bowser: So, it goes along with that article I read from ARP about actually realizing how much bigger it is. And how much it has become a part of our DNA. And gaming has become a part of DNA. D&H is an acronym, we’re BFGs, Built For Growth. Well, Built For Gaming too.

Rob Stott: Yeah.

Chad Bowser: See, it works a lot of ways, that BFG works really well. But we saw it and I was looking at these numbers and as I said in the beginning, gaming is constantly jumping over itself and not by little jumps, huge leaps. Partners like Nvidia and AMT are constantly bringing out new and more powerful graphics cards and products. Intel is constantly ramping up their processes to be able to game. Intel is doing their own graphics cards right now. It is always trying to one up each other and the consumer is trying, wants the best. They want to keep up, they want to be… It’s like the really cool thing is with gaming, you can buy yourself to be one of the best gamers. Your pockets can give you that advantage.

And that’s why as a technology solution provider and a resource to all of our partners out there, we want to be able to constantly refresh them and keep them armed with the knowledge of, “Hey, what is coming next?” Look at artificial intelligence and the role that’s going to play in gaming and our everyday lives. So we looked at it and I said, “Hey, this is big.” We took it, separated it, we put it over here, we started watching it and it just started growing. And our biggest growth came from PC gaming.

We are one of the biggest PC gaming providers in North America. We work with all the retailers. We work with all the OEM partners. We work with part of MSI and ASUS, HP, all their brands are carried. We have very fancy high-end desktop partners like CLX and custom-built and all the display, Samsung, LG, Corsair. I mean, the list is immense. Anyone that wants to go and visit D&H, we actually have a website you click on, see all the different partners we add. And as we grew we added more labor, more specialists. There’s a team inside of D&H that love gaming, but no gaming too. Beyond me.

Rob Stott: No, it’s awesome. I mean, what’s crazy is we haven’t even talked about… You talk about the industry kind of leapfrogging itself regularly. We haven’t even touched on virtual reality and everything that can do in the future. And future, I mean, you look at the product that’s available now and the ultimate immersive experience of having that headset and being in the game and feeling like you’re part is just a whole… We could have a whole nother podcast on that, but-

Chad Bowser: I know a lot about that category too.

Rob Stott: It’s crazy. It’s a crazy space. And you referenced it, that article about kind of dispelling some misconceptions that are out there about the gaming industry. And I told you ahead of time, we talked a couple of days ago about this and just casually throwing out the question to some colleagues after seeing this AARP article about what percentage. It was kind of the main crux of even wanting to do this. What’s the percentage, I would ask them, that they think of people 50 and over that game every day. And I noodle on that for a minute. Watch them stir, think, “Well, is he trying to trick me? This sounds like a trick question.” But I didn’t get anyone that told me, “Over 20%.” 5 to 10, 10 to 15 were average ranges. This article that you’re referencing, 50% of people 50 and over that game every day. I mean, I think that says a lot right there, right? Just off the top about how sort of widespread the gaming is as an industry and how popular it is across not just young generations but all generations.

Chad Bowser: So, I read that article and I had a, what do they call it? A moment. I didn’t have a midlife crisis, but I had an out of body of experience. I read the article and to the listeners out there, “Hey, I’m 50.”

Rob Stott: And I have to be clear that this was not an intended target at you, that has to be said.

Chad Bowser: But it triggered something, and the article is a hundred percent spot on. There’s a generation, Gen X for some reason, society and social media wants to skip over our generation. We talk about boomers and we talk about millennials. But Generation X, born nineteen sixty-five, nineteen-eighty. Do you know what happened in the gaming world in our world in those time periods? Star Wars came out. You were a teenager, some people, young child. Star Wars, my favorite movie, Tron. Do you know 1988 was the first time that Madden came out on the Commodore 64?

Rob Stott: Crazy.

Chad Bowser: All that stuff. The worldwide web launched in 93. Sega, Nintendo, all this stuff came out and Generation X and late boomers, we were in our young years, teenage years and 20. And as I said, the technology leapfrog getting better, changing how we game. We went from console gaming to playing games like X-Wing versus TIE to things like War to Warcraft, League of Legends, and then eSports. And we got crushed into the pandemic and all of a sudden this e-NASCAR event came up and people were doing that and we were gaming more at home. And then one day I turned around and I’m 50, but I’m still gaming.

But what has changed between me being a 19-year-old gamer and me being a 50-year-old gamer is the strength of my wallet and my buying power. I had to choose ramen noodles over the latest hit coming out, now I don’t have to do that. And I’ll tell you anyone of my age range, if they stood in line to buy their son or daughter that Nintendo Switch, they were inside also standing in line for themselves. Don’t let them lie to you. If you were to go right now and you see the lines, people standing outside waiting for the Nvidia graphics cards, see how old they are. I bet you there’s a real high mix of people over 50 getting those graphics cards.

Rob Stott: Right. Well, the funny thing is you talk about, aside from the professional eSports gamers that are out there that have the support of the sponsorship money and things like that to be able to afford the casual gamers, that older generation that wants to keep up with the young generation that is doing this and advancing their own video gaming skill sets, they can afford those products to, like you said, afford themselves the opportunity to compete against those everyday gamers that are out there. So for sure, and I just think about… You mentioned the sports games and things like that and how those have evolved and allowing you to relive the past and things like that.

Dive into Madden, what are we at Madden? Gosh, you said 88. So it’s like 35 years old. So it’s a 35-year-old game at this point. So just neat to see the industry evolve the way it has and knowing too, if that’s the number now it’s 50%. Now you think about kids that, I mean, they’ve been essentially born into this world of having games at their fingertips and things like that. And as they become more affluent over time and the opportunities that exist to target them and build out these gaming rooms, it seems like it’s only going to grow.

Chad Bowser: It’s going to grow. As time passes, the number of gamers over 50 is going to go very quickly towards 90% once the millennials that… We gave them all this gaming stuff, but we played a long time. It will be most of the people and why? Well, also the other part is not only does it keep us in touch, it keeps us sharp. It keeps our minds going. It challenges us. You never want to let the old man or old woman in, and gaming keeps that at bay. I plan on gaming until I can’t touch the keyboard or pick up the controller. I’ll probably be 80 and gaming and I won’t be alone. I’ll have good company with me on this journey.

Rob Stott: No, I love that. And I mean I think the numbers right there should be enough for a retailer to realize like, “Oh, there is an opportunity here.” But even if that’s not enough, what’s kind of the pitch for them? If they’re concerned maybe about, they might hear some of the things about the margin because again, they’re probably only thinking about the consoles that don’t make money, in fact probably lose money. And then the software, that’s where the margins are. But I don’t know how much of that goes back to the software company. So they might have their concerns in their mind. What’s kind of the pitch to help them get over that hump of realizing that there is an opportunity here?

Chad Bowser: Well, and the margins in console gaming, it’s tight and a lot of the bigger partners do very well and obviously they have found a way to stay at that. But as we identified gaming, PC gaming is definitely a strong area where our partners and your retailers can make more money. But also the experience of selling gaming, and I gave this advice to all my partners who are selling consoles, I said, “If you just sell a console, you’re not going to be profitable. You have to sell an entire experience. You have to get your customer to buy the entire experience.” If you were going into a house and you were setting up, someone wanted you to do a custom installation of a gaming room for them, all the things I had mentioned before, it starts at the desktop.

And you want to do a desktop because that allows them to get that cool RGB look and upgrade it. But then you get the monitor, you get the chair, you get the furniture, you get the ambient lighting, you get the quality of sound speakers or sound equipment. I often let the keyboards and mice, that’s up to the individual user, left hand, right hand. You don’t know that. But then there’s also, someone told me, and it’s true, there’s the internet connection. You’re not just going… You’re going into these homes, you’re going to do a lot for the experts. It’s making sure they have gaming routers or powerful routers or Orbi set up to extend the range of it.

If you want to cross blend it into a home entertainment room with the dropdown projectors or even high-end monitors made by some of these people. Corsair, Samsung, LG makes some wonderful monitors. Bending flex monitors, dual purpose. So there is margin in there. And then on top of it, it’s what they add as an individual making all these come together. There is a price, and there’s a good reason why this individual adds their value because again, I’m 50, I have my big boy job. And at the end of the day when I want to unwind, I want to relax, I don’t want to have to build all that. I want to be able to sit in my chair, push the play and go. And if someone can provide that solution for me, I’m a happier man.

Rob Stott: What I love about the way you just described that is it doesn’t sound too different from any conversation they’re probably already having around going into a home and doing these things. Take an entertainment room, if they’re putting in a home theater, say, because I mean, that seems to be the standard for what a custom installer does. If they’re going in, they’re putting in seating, they’re putting in probably lighting, I mean, they’re going to have to re-network the house to some extent whether that’s for audio speakers that are in the walls or upgrading for better connectivity in that room because they’re going to have a media server. There’s a lot of those things that you mentioned that they’re already doing. So this is an add-on conversation, just kind of understanding like, “Hey, whether it’s a pitch or you realize you walk into their house and maybe you see a console lying around and it’s maybe a PS3 and you want to give them that opportunity to upgrade to the latest and greatest.” But it’s not too dissimilar from what you’re already doing.

Chad Bowser: Yeah. And you know what? There’s the phrase, “Read the room.” And you’re going into their house. So you get a better chance to read the room and read the person you’re selling to. They say, “I want to build this home theater cave.” And they NASCAR stuff up all over the place. You ask like, “Hey, do you doing racing simulators and that?” And it’s like, “Yeah, I actually do that.” And boom, all of a sudden, next thing, “Do you ever think about getting a PC and getting racing wheels and the racing pedals and the full solution?” And now you went in there to sell them a home theater and you just created a racing sim station for them. And the add-ons, again, the furniture. Do you stow it? Is it alive? Is it there? There’s a lot of untapped potential and I know quite a few people that are racing sim fanatics. Not my soup of choice, but it’s… And Flight.

Rob Stott: Right. Yeah.

Chad Bowser: I should mention that there’s a game that Microsoft… It’s called Flight. You know what you do? You fly a plane in real time and people love that. They will take eight hours and fly the plane from LAX to London.

Rob Stott: It’s crazy.

Chad Bowser: And they love it. I actually did it and it was really cool. I crashed my plane into the Harrisburg International Airport, so.

Rob Stott: Oh, no.

Chad Bowser: We’ll stick to game-

Rob Stott: Thankfully it was virtual and that’s set up that way. No, but you mentioned that the simulator, I think back to the pandemic and if I recall mean when NASCAR was shut down for a time, right? Those drivers to stay sharp, and even now I think a popular name, if you’re familiar with the racing industry and Dale Earnhardt Jr. Being a big gamer, I’m pretty sure there are multiple racers out there that have these simulators set up. So you can’t waste gas, waste tires trying to run around a track for practice laps. Hop into your simulator and do the same thing. And they have these professional rigs set up so that they can test these tracks out before they even get on one of their buses, their tour buses and end up down at Pocono Raceway or whatever so that they can practice that tricky triangle and figure it out, right? So I mean, it’s just cool. It’s a unique space.

Chad Bowser: There is a peer of mine who is over 50 and shall go unnamed, but they work for D&H and they’re fanatic of NASCAR racing simulators.

Rob Stott: That’s awesome. Well, hey, him and I may have to talk, so… No, that’s great. Well, I want to close. You kind of mentioned a few of those opportunities in these simulators obviously being one. But is there any area that you think maybe it is the big opportunity or where even you might still see some untapped potential in this industry for retailers or custom installers out there?

Chad Bowser: I would offer gaming in any and every consultation I have because it is so basic. Read your customer, start here, you see there, “Well, it’s an Xbox sale.” You go there. If it’s a higher or more into gaming, I would go desktop and I would evolve it. It should be thrown in with every consultation and every offering because it is so mainstream, it is every day. And the integration of when you’re doing it, you’re hooking up the smart TV to the internet and all this stuff where you’re hooking up the sound, why not have the gaming consoles now. They replace the old Comcast box.

Rob Stott: Yeah.

Chad Bowser: They now do that. They’re a media center too, so it’s the computer it, they’re multipurpose, they’re very powerful. So it should be a part of it. Start with the seed of the gaming console or desktop, and then span it from there. That’s where you start. And those are the questions that… And I start looking at some of the ones that the partners out there that can do custom-builds and define them for that customer and are very flexible and very willing to work. And then start building the experience. From that it’ll all start waterfalling, the monitor, the networking, the power protection and the surge, the ambient lighting, and the furniture. So, it’ll go boom, boom, boom, boom. One thing after the other.

Rob Stott: Kind of like a big domino effect. I love it. No, that’s cool. Like I said, a really unique topic. It shouldn’t be unique. It should be so commonplace and I think we’ll start to see, I believe, retailers realize that as well. So appreciate you taking the time and diving into it with us, Chad. Really quick conversation.

Chad Bowser: This was a lot of fun.

Rob Stott: Yeah, absolutely. We should do more of it. Maybe next time I already offered it to NKBA that I’d pop by their Bethlehem office. I’ll take a John out to Harrisburg here, Hershey, pick up some chocolate and some of that phenomenal corn. I know big cornfields out there. Some great… Best corn.

Chad Bowser: We’re building an eSports lab, so we’ll let you walk that.

Rob Stott: There we go. I love it. No, this was great. So we appreciate it and look forward to doing it again soon.

Chad Bowser: Awesome. Thank you very much.

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