Has Video Game Retailing In UK Changing Forever?
It has been known for some time that the only specialist video game retailer in the UK “GAME” has been having some financial difficulty. With debt to suppliers, rental space and staff.
They have been able to keep operating, but Nintendo and EA Games among a few others refused to supply new realises to them, until GAME has paid their debts to them.
This has meant that GAME has lost out from sales games like MASS EFFECT 3 that could have helped from going feather into debt. At the begging of March GAME and their sister store Gamestation, (also owned by GAME) started to do a spring sale.
This was on all per-owned games. With this sale you could pick up titles for as little as 47p, games that has only recently come out could be picked up for only £14.99 Battlefield 3 being a prime example.
On 22nd of March GAME stopped all trading on the Stock Exchange as it was deemed that the company share stock was not worth selling. GAME had been in talks with OpCapita to take over the ailing chain however the Royal Bank of Scotland (RBS) stopped the deal going though. RBS is one of GAME backer.
On Monday the 26th of March GAME filed for Administration. PricewaterhouseCoopers have now taken over administration of GAME. Thir first task was to close 277 stores which came into affect around 1pm. This meant that over 2,000 staff at GAME and Gamestation has lots their jobs. As of the 27th of March 333 stores remain open.
With GAME now in Administration, there are a number of companies looking at buying the chain. This includes the US rival Gamestop as well as the rumoured WAL-MART.
How did GAME get into this situation?
Well there have been a number of factors to this. At the forefront is that with new AAA titles being realised GAME where selling these around the £50 mark. But with Supermarket (TESCO, Sainsbury, Morrison and the WAL-MART owned ASAD) also selling the latest realises, they have been able to under cut GAME by selling them from £10 – £15 less.
Then there is the selection of games that GAME stocked. It tendered to be only the games that are currently in the Game Charts. So if a game was realised six months ago, it would be hard to find a brand new one in GAME. You where more likely to fine it second hand but still near the price of a brand new game (sometimes only £10 different.) Now with EA and other game companies opting to have one time passes so they can still make money on games that where sold second hand, this really was not ideal. This has lead people to go to internet to buy these games brand new, to save having to pay additional cost for the one time pass.
An example of this was my father wanted to get my son F1 2011 for the PS3 for Christmas. The game had come out in September 2011. He went into his local GAME, but they did not have any. He also looked around other stores like HMV as well as the supermarkets. But none of them had it in. F1 2011 is not considering a AAA game as it does not bring in the same sort of money as Call of Duty. So once these stores stock was sold that it, they would not renew there supply of it. This meant that my father had to go to Amazon to get a new copy. (F1 2011 is also a game that has a one time pass.)
This meant that apart form new realises, consoles and accessories. Everything else was second hand games. This still made the company money, but most of the time it was cheaper to buy games second had from CEX, who deal exclusively in the second hand market.
The next major issue GAME had was that there where more than one store on a high street. It was also not unheard of having two GAME stores and a Gamestation on the same high street, they where normal with in a five minute walking distance from each other. With the exception of Gamestation, the GAME stores would be identical.
Now for large Shopping malls like Bluewater or Lakeside, this would be expected but not on a normal high street. So the company was spend more for these stores, when just one store on the high street would have made the combined profit of both stores, not including the saving form cost of the staff and rent from the second store.
Was GAME all bad? No not at all. While for the Hardcore gamer, GAME was lacking in it chose of new games that where no longer in the game chart, they did from time to time have some good deal, epically when it came to bundles. (A game console with a game and movie. Or second controller.) They also did some good deals for trading in old games for new.
It was also a great place for none gamer to go in and ask question about a game or console that they where thinking about getting.
GAME also allowed you to try in-store before you bought a product. This is something that you can’t do in a supermarket or HMV.
If GAME is to leave the British High Street, it would be leavening a large hole in the market, just like Woolworths did when they filed for Administration back in 2009.
It would mean that CEX would see an increase in business in the second hand games and consoles. But on the high street it would only leave the supermarkets and HMV for the new games. Would it be major change to the high street, honestly as the GAME currently stand I would have to say no.
So what can GAME do to make it different from it current form?
There are a few things that they can do. Well they have already done a major issue, which is getting rid of the second store from the same high street.
Next would be to move from the box stores they currently use and move into a store with more space.
The reason for this is so they can have a better selection of games instead of just the game chart games. This will bring back the hard core gamer, as the will actually have selections of games to buy that are not part of the second hand games. Even if they won’t be able to compete with the supermarkets with their prising for new realises, they will be able supply games that the supermarkets won’t stock.
They also need to sort out their points system on their loyalty cards. As it confusing, as hell. If they are to keep it, they should do the same as BOOTS, for every pound spent you get a point, every ten points is worth a pound. Though they could have it every 20 points is worth a pound. Seeing as people will spend between £20 and £50 each shop.
They should also follow what HMV has done. HMV is primarily music and film store. In recent years they have been suffering from low sales due to the popularity of the digital download. What HMV has done to stay in business is to sell more products like T-shirts, books and electrical goods that are geared towards the music industry I.E headphones. If GAME was to do this, it also brings in more customers into to their stores. There are loads of books, comics t-shirts and memorabilia that is geared towards the games industry. We already know that special editions of games that go for £80 to £150 sell quickly. So if GAME was to sell the products I have mentioned it would bring in more customers.
The internet plays a major part these days, but I am one of the one that don’t like to use it as they normally deliver when I am at work, so I end up going down to the delivery depot at the weekends to pick it up as they will normal re-deliver during the week.
So in conclusion has Video Game Retailing in UK Changing Forever?
No, it won’t but it could if GAME survive and do the changes I have suggested. Then it could change and for the better.