Are GAME about to close down?

47
Found 2nd Feb 2012
Seems like Game are in difficulties.
Might be time to spend any loyalty points/gift vouchers you have.
Link in first post.
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I'll post the text below, for those of you who work and are unable to access certain sites.
Done it for you....;)

Don’t pretend you’re shocked. In the past two days, a report of GAME’s difficulty in maintaining credit insurance has been backed up by a statement confirming the UK retailer is in talks to secure lending. The well-known high street chain has also said it may sell off overseas concerns.

Questions are now being raised as to whether GAME has a future at all. If a retailer’s credit insurance fails, it will ultimately mean it’s unable to stock new products. This would have a serious affect on GAME being able to operate in any way.

Speaking to MCV yesterday, GAME moved to assure that it’s working with separate publishers to ensure flow of stock. But while Metal Gear Solid: HD Collection, Final Fantasy XIII-2 and Soul Calibur V will be sold in GAME stores tomorrow – the games vanished from the firm’s website yesterday – there can be no doubting the company is facing a serious test of its ability to remain viable.

To illustrate the seriousness of the matter, EA said in its Q3 earnings call last night that it was concerned about the situation, as it’ll lead to decreased sales and increased debt if GAME’s trouble becomes terminal.

The larger question is whether or not time is finally up for specialist high street games retail. GAME is not the only one under potentially fatal pressure. HMV admitted in six-monthly results at the end of 2011 that general economic malaise “may cast significant doubt on the Group’s ability to continue as a going concern in the future,” reporting both wider losses and a double-digit revenue drop.

While it may be comforting for stores like HMV and GAME to blame international depression on what’s happening to their businesses, anyone with even a passing professional interest in media retail knows it’s not the whole story. And in the games space specifically, it may very well be that time for the specialist brick and mortar boys has finally run out.

Those with loaded guns, and those who dig

The problem is hardly revelatory: people are shopping in increasing numbers on the internet. We are in a transition period between a man walking into a shop and buying a video game, and a man buying a video game from a website. This has nothing to do with whether or not discs have a future in games going forward; it’s about where people are buying discs right now. There’s no question: the internet is winning.

Total retail sales in the UK were up 3.65% last year, while online sales grew 14%. While the trend is general, the situation in the games trade has clearly become untenable for GAME.

GAME is now apparently unable to offer publishers credit insurance. By way of explanation: when a store like GAME stocks a product, the publisher of that product is normally insured. Soul Calibur V is out tomorrow, for instance. If GAME cannot offer Namco credit incurance on the stock it intends to sell, that means Namco has no guarantee it will be paid for its games. If GAME goes bust next week, and the credit on Soul Calibur V’s GAME stock isn’t insured, Namco will lose a great deal of money.

The issue of credit insurance in games retail is of particular importance for two main reasons. Firstly, there are the license fees publishers have to pay platform holders, such as Sony and Microsoft. Secondly, developing a triple-A video game is extremely expensive. If, for example, HMV can’t supply credit insurance on stock of music CD, the risk to the publisher is nowhere near as acute as it would be on a video game. As such, any sign that a retailer has failed to secure credit insurance will stop supply of games stock very quickly. Especially in the current climate, risk on a stock large enough to supply 600 UK stores could easily kill a mid-range publisher, and even the very biggest – EA, Activision, etc – will take a very dim view.

Show me the exit

No stock, no business. GAME does have some options, although they’re essentially futile. It could close stores and fire staff. This is only a short-term solution that could be made in an effort to balance books, and doesn’t fix the fact that it’s clearly failed to manage the transition from high street to internet. While the packaged goods business is declining and online sales are increasing, GAME.co.uk has failed to gain enough market share to prop up the business. GAME faces particular difficulty in this area as it doesn’t ship from Jersey, as do Play and Amazon, meaning its consumer-facing costs are generally higher.

Merging GAME and GameStation into one brand? This is basically the same as closing shops and firing staff.

In short, GAME is in serious trouble, and it’s likely it will cease to exist in the near future. It may have negotiated stock for releases this week, but what about next week? And the week after that? Publisher have known GAME’s been experiencing difficulties for months, but it’s only in recent days that the severity of the situation has hit the press wholesale. It will be difficult for GAME to be able to navigate these problems quickly enough to survive.

Is this is end for games on the high street? Of course not. Many people still want midnight launches, and they want to be certain of games on day one, but specialists like GAME are being bullied out of relevance in the “event” release space by massive general stores like Sainsbury’s and Tesco. GAME’s niche as a shop which stocks a wide variety of games has traditionally kept people walking through the door for all their gaming needs, but the whole concept is failing. If you want an historic game, do you go to your local store and find it’s almost certainly not in stock, or do you buy it online? You buy it online. GAME’s business of being a catalogue retailer is becoming void. Day-oners will almost certainly go to a supermarket for the next Call of Duty: it’s cheaper and there’ll be more stock. So you go to Sainsbury’s for your triple-As to ensure you get them on time, and you buy Assassin’s Creed II and Halo 3 from Play.com.

And where does that leave GAME?

Someone once told me that for an business to succeed it must be one of three things: faster, cheaper or better. GAME can’t be faster. Day one is day one. It can’t be cheaper on the high street because it’s competing against multi-national giants, and it doesn’t have the set-up to stay below competitors online. A games retailer that doesn’t insure stock will find it difficult to be “better,” to say the least.

Watch the clock. It’s starting to tick at double-time.
For a few seconds, there was a serious amount of text in two posts

Cheers!
Hahaa ino rite, was gonna delete mine but noticed you already had!

Do you think its true?
They've been in trouble for a while. They are suffering in the same way as HMV.
what about gamestation or gameplay ????
Don't see them vanishing that quickly, the vita will bring it enough revenue i would have thought, then after that is the wii u, don't see how Hmv can survive making a loss every year, but game who normally make a small profit each year can't
They'll be around for a while longer. Before going under, they may as well get rid of Gamestation and stop having 2 shops within metres of each other.
davver99

what about gamestation or gameplay ????



Gamestation are the same company technically aren't they? so surely they will go the same time as game
cool story bro
I for one wouldn't really miss Game. When I bought my £35 PSN card a few weeks back, that was the first time I'd been in Game for about 3 years.
If it does go, sad for the employees, but I don't think they did enough to compete with either online or the Supermarkets.
sennasnit

I for one wouldn't really miss Game. When I bought my £35 PSN card a few … I for one wouldn't really miss Game. When I bought my £35 PSN card a few weeks back, that was the first time I'd been in Game for about 3 years.If it does go, sad for the employees, but I don't think they did enough to compete with either online or the Supermarkets.



But its the same for most high street stores, they can't compete with the buying power of supermarkets, and have the disadvantage of paying massive rent on online stores who only have a warehouse with minimal rent.

Downside of the internet age of cheaper stuff is the death of the highstreet.

Game i only ever go into if i need something in a rush or buying for a birthday present so they can get a refund easily
Another shop I reckon ive spent less than a fiver at over the last 5 years.
Same as WHSmith and HMV, Can recall spending money in all these shops fairly regularly 5-8 years ago. Nothing these days though.
Alfonse

cool story bro



Talking about a shop on a shopping forum deserves an insult? Better than a bull in a carpark surely?
As an ex-Game employee it will be saddening to see them go.

The indie I worked at (prior to University) closed their doors last year too
Alfonse

cool story bro


http://chzgifs.files.wordpress.com/2012/01/funny-gifs-sad-but-true-bro.gif
They do not keep up to date with online retailers in terms of prices. they lose a lot of sales due to their outdated thinking that people these days would prefer to go to a shop to buy rather than buy online. even their online prices are generally more expensive than other retailers. its a similar situation with HMV.

If you look at Blockbuster they had a serious threat from livefilm a few years back, they have now diversified and now compete with lovefilm as well as run their shops.

If a business doesn't keep tabs on competitors then they are in serious trouble.
I reckon they'll try to sell off Gamestation to reduce their costs if things become too bad whilst they might hold on to gameplay due to it being online only.
Yeh, good news if game does close down, cant believe they have got away with selling pre owned games as new for so long.
Daytrader

Yeh, good news if game does close down, cant believe they have got away … Yeh, good news if game does close down, cant believe they have got away with selling pre owned games as new for so long.



Highly cheeky.
jonny619447

They do not keep up to date with online retailers in terms of prices. … They do not keep up to date with online retailers in terms of prices. they lose a lot of sales due to their outdated thinking that people these days would prefer to go to a shop to buy rather than buy online. even their online prices are generally more expensive than other retailers. its a similar situation with HMV.



I don't know how competetive they are online, but no B&M store will be able to compete with online prices
Daytrader

Yeh, good news if game does close down, cant believe they have got away … Yeh, good news if game does close down, cant believe they have got away with selling pre owned games as new for so long.



I'd never wish for a company to close down as there's always jobs on the line
They have been doing really good prices recently though (Mirrors Edge £2.89 used), as well as the exclusives. The reason why I bought Battlefield 3 and Final Fantasy XIII-2 from them was because of exclusives. If they can keep getting those deals this will end up being just a false doom and gloom story, they should just lose all the expensive-rent stores in popular places and go elsewhere as well as moving online business to Jersey like someone suggested.(if they haven't done that already) I guess it is not as simple as that though, they might have done it if it was...
sennasnit



lol, point being I couldn't careless about Game's lack of stock, poor pre-order service, grotesque prices and abhorrent trade in prices, so yeah well funny that I go elsewhere and by their financial situation so do many others, do you shop there.................
Edited by: "Alfonse" 2nd Feb 2012
colinsunderland

I don't know how competetive they are online, but no B&M store will be … I don't know how competetive they are online, but no B&M store will be able to compete with online prices



I'm fully aware of the considerable over heads of running a B&M store over an online retailer with a couple of warehouses and a call centre but then they should have maybe closed alot of stores and put more into their online business. The problem is they are not competitive online. They have massive buying power but yet are falling behind relatively small online retailers.
Game are just so unbelievable uncompetitive in their pricing im surprise they've lasted this long
Am I right in saying that the vat tax loop hole that jersey currently have is due to close. Wouldn't that therefore bring jersey based retailers more in line with hmv/game
ed1980

Am I right in saying that the vat tax loop hole that jersey currently … Am I right in saying that the vat tax loop hole that jersey currently have is due to close. Wouldn't that therefore bring jersey based retailers more in line with hmv/game


I read that somewhere too, can't find it now.
sennasnit

I read that somewhere too, can't find it now.



Yes think all it was, was a drop in tax free amount from £17.99 to £15, so not that big of a difference
sennasnit

I read that somewhere too, can't find it now.



Do you shop at Game then, as you are checking this thread?

Cool Story Bro
I pop in probably three times a month.

I can't remember the last time I bought anything.

I tend to buy games after release from one of the privately owned second hand shops around here. My local one guarantees 50% back if you keep the receipt, I recently had LA Noire for a tenner, I can play it at my leisure for basically a rental price. Game make this whole process too convoluted, they overprice s/h stock, and it does irritate me that whilst browsing I get the 'can I help you find something' line three or four times. I'm sure that all bar middle-aged women will go straight to the counter to ask for something specific (even if the staff often answer with 'I don't know, you'll have to look through the racks'

I have seen people dump stock and give up after being queued up for ten minutes in Game many times. Two people working on the tills and four on the shop floor makes no sense. Asking customers about loyalty cards, reserving games, and the rest whilst a queue snakes around the shop is a great way to irritate customers. The shops also have really poor 'stock dumping' areas around the racks making it impossible to get around with a buggy. This has stopped me going in in the past. When you roll up to the door and there's a stack of unsellable rubbish special edition boxes right in the door combined with people playing on consoles on either side, it's 'give up' time.
winifer

Yes think all it was, was a drop in tax free amount from £17.99 to £15, s … Yes think all it was, was a drop in tax free amount from £17.99 to £15, so not that big of a difference



It dropped from £18 to £15 in November 2011 and is disappearing for good on the 1st April this year. Still won't stop Game from being uncompetitive though, despite the occasional one off bargain every 6 months or so.
tinkerbell28

I'm not surprised, I've seen 3 stores in one town, a stones throw from … I'm not surprised, I've seen 3 stores in one town, a stones throw from each other. Erm why?



3 is a lucky number.
I pop in a few times a week, but only buy if I find a bargain, I feel the best way forward for game is to close one of the brands (prob game!)

could also help increase revenue if they started restocking/accepting retro console games and then reselling at a reasonable price, eg offer £5 trade in for a ps2 and the resell for £13, you could go as far as saying accept ps2 games offer say 30p store credit but resell for £1 (obviously exclude all sports/wrestling games). This allows a probable quick resell

And then also brings in the retro based customers.

I know some stores will accept retro but why not roll this out across the company
re. the Jersey thing - alot of stuff is apparently moving form Jersey to Switzerland where the rule is as it is in theChannel Islands now. They are going mad about it becaus eit will mean that the UK govt will be no better off - because hte fulfilment industry will just all move there.

Not sure if it will all go - like Play, but lots of places like Funky Pigeon are using the same loophole.

Game - my lad loves going in on a saturday or school holidays for a look if we are in town - but prefers hmv because they have things you cana try out ............. but that might just be in our towm ........... maybe Game have ipads etc to use in bigger stores ?
Is it not ironic that EA are concerned about GAME ( Linky ) yet their constant use of online passes, now being used for single player games such as Kingdoms of Amalur, must have had a serious impact on the abiltiy to sell pre-owned games which I would have thought is a fair part of GAMEs stock inventory.
Much prefer gamestation to game.

(Much) cheaper, better staff, more demo consoles, more stock, able to order in...

Need I continue?
Mallinersha

3 is a lucky number.



2 Games and a game station within a stone's throw of each other in bristol
Alfonse

Do you shop at Game then, as you are checking this thread?Cool Story Bro


I started the thread, of course I keep checking it, words fail me...
http://i664.photobucket.com/albums/vv7/magikdinosaur/go_sit_corner_dumbass.jpg




Edited by: "sennasnit" 2nd Feb 2012
Will be a great shame if another high street store closes with yet more staff losing jobs, it's rarely the staff in the stores that cause the closures, it's the poor management skills and lack of foreward thinking that does, unfortunately it will be the shop staff, warehouse staff and their suppliers that suffer the most
Edited by: "wishihadadonkey" 2nd Feb 2012
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