Marketing Exchange Presentation December 16, 2004

AGENDA 1.EB GAMES Overview 2.The Experience Economy 3.How we do it at EB GAMES 4.What Does This Mean for YOU?

1) EB GAMES Overview

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 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

Demographics Typical EB Consumer Sex: Male Ages: HH Income: $35,000-$49,999 Employed Full Time Some College Education Typical EB Consumer Sex: Male Ages: HH Income: $35,000-$49,999 Employed Full Time Some College Education

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

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 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

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 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

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 (Starbuck’s) 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 (Starbuck’s)

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

Pricing Options EB Options Competitors - $ $49.99 with one or New Release more trades - $ $44.99 pre-played - $49.99 New Release

2) The Experience Economy

Economic Shifts Over Time Agriculture Economy Industrial Economy Service Economy Experience Economy Agriculture Economy Industrial Economy Service Economy Experience Economy

What is the Experience Economy The 4 th Economic Offering Every Business is a Stage…therefore work is Theatre Memorable Events that a company stages and charges extra for Restaurants become Eatertainment Stores become Shoppertainment The 4 th Economic Offering Every Business is a Stage…therefore work is Theatre Memorable Events that a company stages and charges extra for Restaurants become Eatertainment Stores become Shoppertainment

Economic Offerings of Products:

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

Economic Distinctions ECONOMIC OFFERING Economy Economic Function Nature of Offering Key Attribute Method of Supply Seller Buyer Factors of Demand 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 Inventories after Production Manufacturer User Features SERVICES Service Deliver Intangible Customized Delivered on Demand Provider Client Benefits EXPERIENCES Experience Stage Memorable Personal Revealed over a Duration Stager Guest Sensations

3) How we do it at EB GAMES

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 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

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

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 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

4) What Does This Mean For You

Who is Doing it Well? Starbucks Disney World VEGAS Hard Rock/Planet Hollywood/Dive/ Rainforest Cafe NikeTown Cabela’s Progressive Insurance Hertz Gold Service Commerce vs. ING Starbucks Disney World VEGAS Hard Rock/Planet Hollywood/Dive/ Rainforest Cafe NikeTown Cabela’s Progressive Insurance Hertz Gold Service Commerce vs. ING

Questions To Ask Yourself: What if Starbuck’s/Disney entered my industry…what 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? What if Starbuck’s/Disney entered my industry…what 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?

KEY CONTACT PAUL KOULOGEORGE EB GAMES Vice-President of Marketing (610) x7940 PAUL KOULOGEORGE EB GAMES Vice-President of Marketing (610) x7940