Sunday, 18 March 2012

The End Of A GAME-ing Era?

After an 11% fall in share prices on Friday (according to and the GAME company issuing letters to customers detailing local impending store closures, it could be assumed that the company isn’t far from GAME-over.

The drastic fall in company shares comes after both company stores (GAME and GameStation) pulled from stocking one of the most highly anticipated 2012 releases, Mass Effect 3, and refunding pre-order consumers, directing them to buy elsewhere. This ensued a string of gaming developers including Nintendo, EA and Capcom to pull some of their upcoming releases from the retailer’s grasp, for example Mario Party 9, Street Fighter x Tekken, Kid Icarus for Nintendo’s unveiled 3DS and the third installment to the acclaimed Ninja Gaiden series. After asking staff from a branch of GAME, they concluded that the ultimate blow was their monetary ability to buy from major leading global game developer Microsoft, and their unwillingness to negotiate in terms of buying price.

It’s not too hard to envision the problem, as GAME’s business model is structured so that traded in ‘preowned’ games are the company’s richest profit-spinning component due to the notoriously poor trade-in cash and in-store exchange values dealt to potential exchangers. This means that less profit is made out of newly bought games and so the need to barter for the cheapest amounts to then sell on is paramount to the company ensuring minimum losses. If corporations such as Microsoft are not willing to negotiate, coupled with the possibility that gamers can find better trade in deals for their unwanted titles and so trade in elsewhere, means that ultimately GAME will lose out on pre-owned profits and fall down on higher buying prices and the future does not bode well with some rumours stating that there is an impending 2 weeks deadline for the company to turn themselves around.

A statement issued from GAME previously in February stated that 35 store closures from their current 610 UK outlets would take place by the 24th March and that 60 more closures are due before the year is out. Many of the current 10,000 staff employed regionally are expecting redundancies, consequently furthering the UK’s problematic unemployment rates.
Another aspect of the downfall of the UK’s leading gaming retailer could well be partially due to the rise of internet shopping. Consumer reports during the Christmas period described how internet purchases had reached their all time high due to the population having less money to spend and therefore the consequent need to scour for the best possible deal which may have essentially proved tragic to GAME Company.

In conclusion, although there is major uncertainty over the meanwhile lasting duration and even the ultimate survival of the company, it will prove to be a major loss and a gaping hole in the gaming high street market despite the fact that there have been mixed opinions regarding the company as a whole and their tactics during their entire lifespan. Amidst the uncertainty, it definitely looks like GAME are preparing for the worst, and every visit into the store rings a reminder by staff to use up accumulated loyalty points, ‘just in case’. It’s unfortunate that it is partially due to the unloyalty of customers and suppliers alike that is leading to the rapid decline of GAME and Gamestation.


Post a Comment

Like what you see? Post your response.