Just a few short months ago, GAME was in a state of rapid expansion, opening new stores across Europe.
But with a somewhat turbulent last quarter and a typically dry Q1, GAME’s credit dried up and the Game Group has gone into administration after a period of poor credit and bad cash flow. Big game producers have pulled out of delivery agreements after concerns over the retailer’s ability to pay them.
It comes at a time of boom in the gaming industry, despite the general downturn in the economy. Statistics show computer game revenue exceeds music purchased and is now on a par with the film industry.
So why was Game struggling? Over-expansion perhaps, but more likely to do with their inability to compete with the ever growing eCommerce threats from the likes of Amazon and Play.com. They were also fighting in the retail sector too, against supermarket giants Tesco and Asda. With their huge buying power, the supermarkets waded in with some killer pricing, stealing some of GAME’s usual cash cows.
It all boils down to price; GAME can’t offer a shopping experience that is unique in any way. It’s not like trying on a dress or checking the quality of your groceries. Ultimately, they sell discs in fancy boxes – if you want to try out a game, just download the free demo at home.
Game might try and tell you their staff add value by giving you advice, but in my opinion they’re useless and irritating in my opinion. They should spend more time making sure the trade-in games cost less than the equivalent new copy (I’ve seen this sin committed over and over again). HMV are guilty of this too.
So what now for GAME? Unless they find a buyer, they’ll go the way of Woolworths. It’s up to the administrators to quickly move in and sell off the unprofitable stores. If the company can lower its costs by becoming a leaner operation, we’ll still see GAME for the foreseeable future.
I personally don’t care what happens to either GAME, HMV or the entire Dixons Stores Group. What we really need is 24/7 courier services to help put the knife into retail electronics; I’m sure the supermarkets and online shopping alternatives will be able to take up the slack.